Written Commentary
Ag Market View for Apr 18.24
April 18, 2024
Dollar Likely to Give Back CPI Inspired Gains
- May 12, 2021
- Alan Bush
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STOCK INDEX FUTURES
Stock index futures are lower as investors remain concerned about rising inflation and higher taxes.
Mortgage applications in the week ended May 7 were up 2.1%, according to the Mortgage Bankers Association and applications to refinance a home loan rose 2.9%.
The April consumer price index increased 0.8% when a gain of 0.2% was expected.
The May Atlanta Federal Reserve’s business inflation expectations survey will be released at 9:45 central time. The April report showed 2.5% inflation.
Stock index futures are likely to at least partially recover today from the lows that were made soon after the consumer price index was released.
CURRENCY FUTURES
The U.S. dollar index firmed from the 2-1/2 month low that was made yesterday. Futures advanced when the larger than estimated consumer price index (CPI) was reported.
The euro currency is lower after a report showed euro zone industrial production increased less than expected coming in up 0.1% from a month earlier in March but missing market expectations of a 0.7% growth.
The European Commission revised upwards its GDP forecasts for 2021 and 2022. The euro zone is seen expanding by 4.3% this year and 4.4% in 2022, compared with the February estimates of 3.8% growth in both years.
Consumer prices rose 2.0% on the year, as measured by national standards, and in line with the forecasts of economists. Prices rose 2.1% on the year by European Union-harmonized standards, also in line with forecasts. The inflation rate increased for the fourth consecutive month after the end of the temporary reduction of the value-added tax rate.
The Australian dollar is lower despite news that building permits increased 17.4% month-to- month to the second-highest on record of 23,176 units in March.
INTEREST RATE MARKET FUTURES
Futures declined when the larger than estimated consumer price index was reported.
Federal Reserve speakers today are Richard Clarida at 8:00 Raphael Bostic at 12:00 and Patrick Harker at 12:30.
The Treasury will auction 10-year notes today.
In my minority view, I am seeing indications that the global economy will continue to improve, but growth may not be as strong as many analysts are predicting.
GOLD AND SILVER FUTURES
Most major central banks will probably keep their accommodation for longer, which remains a bullish longer term influence on the precious metals.
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