Written Commentary
Global Ag News For May 21.2025
May 21, 2025
CURRENCY FUTURES
The U.S. dollar index is higher despite interest rate differentials turning bearish for the greenback.
The euro zone’s Economic Sentiment Indicator declined to 95.2 in March 2025, which is the lowest level in three months. This compares to 96.3 in February and is well below forecasts of 97.
Germany’s unemployment rate increased in March at the fastest rate since October 2024. The number of unemployed individuals increased by 26,000 in seasonally adjusted terms, hitting a total of 2.92 million. In addition, the seasonally adjusted unemployment rate increased to 6.3% from 6.2% in the previous month and was slightly higher than analysts’ forecast.
Germany’s GfK Consumer Climate Indicator was at -24.5 heading into April 2025, which is little changed from a marginally revised -24.6 in the previous period, and missed market expectations of -23.0.
The Japanese yen is rebounding from a four-week low as strong inflation data, and hawkish signals from the Bank of Japan reinforced expectations of tighter monetary policies.
STOCK INDEX FUTURES
Stock index futures are lower.
Personal income in February increased 0.8% when up 0.4% was expected, and personal consumption expenditures on a monthly basis increased 0.4% when a gain of 0.5% was anticipated. The PCE price index on a monthly basis was up 0.3% as forecast, and the core PCE price index on a month-to-month basis advanced 0.4% when up 0.3% was estimated.
The 9:00 central time March consumer sentiment index is anticipated to be 57.9.
In the longer term, a more accommodative Federal Open Market Committee will support futures.
INTEREST RATE MARKET FUTURES
Futures are steady at the front end of the yield curve and are higher at mid-curve and at the long end of the curve.
Prices increased when the personal income and personal consumption expenditures reports were released.
Yesterday Richmond Federal Reserve Bank President Tom Barkin stated that the central bank’s “moderately restrictive” stance remains appropriate, given the high level of economic uncertainty and rapid policy shifts.
The yield on the U.S. 10-year Treasury note held steady around 4.35%, hovering near a one-month high.
Federal Reserve speakers today are Michael Barr at 11:15 and Raphael Bostic at 2:45.
Financial futures markets are predicting the FOMC will lower its key interest rate two more times this year with the first reduction at its June policy meeting.
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