Written Commentary
Global Ag News For May 21.2025
May 21, 2025
STOCK INDEX FUTURES
Stock index futures are lower as trade war concerns continue to dominate investor sentiment in advance of President Donald Trump’s upcoming tariff announcement. Reports suggested he is considering a universal 20% tariff on most imports.
U.S. private payrolls increased more than expected in March, according to ADP data. The March ADP employment report showed 155,000 when 120,000 were anticipated.
The 9:00 central time February factory orders report is estimated to show a 0.5% increase.
While traders currently are focusing on the negative implications of trade tariffs and geopolitical issues, in the longer term, a more accommodative Federal Open Market Committee will support futures.
INTEREST RATE MARKET FUTURES
Futures are steady to lower at the front end of the yield curve and are higher at mid-curve and at the long end of the yield curve.
Some of today’s strength in the longer dated maturities can be linked to flight to quality buying.
In the last few days futures have broken out above downtrend lines.
The yield on the U.S. 10-year Treasury note steadied around 4.2% on Wednesday, as concerns over U.S. tariffs have been boosting demand for safe-haven assets.
Federal Reserve Board Governor Adriana Kugler will speak virtually at 3:30 on “Inflation Expectations and Monetary Policymaking.”
Financial futures markets are predicting the Federal Open Market Committee will more aggressively move to accommodation this year.
The FOMC will likely lower its key interest rate three times this year, with the first reduction at its June policy meeting.
CURRENCY FUTURES
The U.S. dollar index is lower, which is a sign of weakness for the greenback, when other flight to safety vehicles are higher.
In the longer term, the bearish influence of interest rate differentials will continue to undermine the greenback.
The Japanese yen is higher today as a flight to safety flow of funds is coming into the yen.
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