Written Commentary
Ag Market View for May 20.25
May 20, 2025
STOCK INDEX FUTURES
Stock index futures are sharply higher on Thursday fueled by strong earnings reports from two major tech firms.
Global outplacement firm Challenger, Gray & Christmas reported there were 105,441 job cuts in April, which is down 62% from the March figure of 275,240.
Jobless claims in the week ended April 26 were 241,000 when 221,000 were expected.
The 8:45 central time April PMI manufacturing final is anticipated to be 50.7.
The 9:00 April Institute for Supply Management manufacturing index is estimated to be 47.9, and the 9:00 March construction spending report is forecast to be up 0.2%.
Anticipated interest rate cuts from the Federal Reserve later this year remain an underlying long term supportive influence.
CURRENCY FUTURES
The June U.S. dollar index is higher as optimism around global trade negotiations improved investor sentiment. Traders are growing hopeful that tariff pressures may have peaked under President Donald Trump, following his remarks on Wednesday that suggested potential trade agreements with India, Japan and South Korea, and expressing confidence in a possible deal with China.
U.K. factory exports experienced a sharp decline. The rate at which exports have declined is the most rapid since May 2020.
Retail sales in Switzerland increased 2.2% year-on-year in March 2025, accelerating from a downwardly revised 1.2% growth in the previous month. This was the ninth consecutive month of growth in retail trade.
Japan’s 10-year government bond yield fell approximately 5 basis points to around 1.26% on Thursday after the Bank of Japan left its policy rate unchanged at 50 basis points, as expected. This marks the BOJ’s second consecutive meeting without policy changes.
Japan’s consumer confidence index declined to 31.2 in April 2025 from 34.1 in March, marking the fifth consecutive monthly drop and was the lowest level since February 2023.
INTEREST RATE MARKET FUTURES
Futures are mostly higher.
The yield on the 10-year U.S. Treasury note was around 4.133% on Thursday.
The Federal Open Market Committee will probably keep its fed funds rate unchanged at 4.25% – 4.50% at its May 7 policy meeting.
However, the Federal Open Market Committee is likely to lower its fed funds rate by 25 basis points four times this year with the first reduction potentially coming at the June 18 policy meeting. Two additional 25 basis point interest rate cuts are anticipated in 2026.
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