Written Commentary
Global Ag News For May 21.2025
May 21, 2025
INTEREST RATE MARKET FUTURES
Futures declined when the stronger than expected U.S. employment numbers were released.
The yield on the 10-year US Treasury note was around 4.269% on Friday.
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.
One additional 25 basis point interest rate cut is anticipated in 2026. Yesterday it was anticipated that there would be two 25 basis point interest rate cuts next year.
STOCK INDEX FUTURES
Stock index futures advanced in the overnight trade as investors welcomed China’s announcement that it is evaluating the possibility of starting trade negotiations with the US Earlier this week, President Donald Trump hinted at potential trade agreements with India, Japan and South Korea, and expressed confidence in a possible trade agreement with China.
There were additional gains for stock index futures when the U.S. employment report was released. Nonfarm payrolls in April increased 177,000 when an increase of 130,000 was expected, and private payrolls were up 167,000 when 125,000 was anticipated.
Manufacturing jobs were down 1,000, which compares to the estimated decline of 3,000.
The unemployment rate was 4.2% as expected, and average hourly earnings increased 0.2% when a 0.3% gain was forecast.
The 9:00 central time March factory orders report is expected to show a 4.5% increase.
Anticipated interest rate cuts from the Federal Reserve later this year remain an underlying long-term dominating supportive influence.
CURRENCY FUTURES
The June US dollar index came under pressure in the overnight trade.
Consumer price inflation in the euro area remained steady at 2.2% in April 2025, which slightly exceeded market expectations of 2.1%.
S&P Global’s HCOB Germany Manufacturing PMI report showed an increase, climbing to 48.4 in April from 48.3 in March.
Retail sales in Australia increased by 0.3% month-on-month in March 2025, following a 0.2% gain in February but falling under market expectations of 0.4%.
Bank of Japan Governor Ueda said the timing of the next rate hike could be swayed a lot depending on the tariff situation.
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