Orange Juice (FCOJ) had a spectacular jump this week, jumping. 13.48% after the US Department of Agriculture (USDA) crop report forecasts 2023 to bring the worst harvest of Florida oranges in 86 years. They estimate producing 16 million boxes of orange juice, down a historic 61 percent on the 41 million produced in 2022. The biggest prices fall this week were in CME Lean Hog futures tumbling to contract lows as excess supplies and weak demand for U.S. pork fueled … Continue reading “Commodity Traders Weekly Outlook: OJ Soar on Production While Lean Hogs Fall on Demand”
Forex Traders Weekly Outlook – Repricing of Fed Hikes Higher for Longer Pumps U.S. Dollar
The U.S. dollar rally continues into another week with the repricing of Fed hikes higher for longer. Two-year Treasury yields surged 30 bps this week to 4.56% (high since March 10th), trading 4.63 at one point. Benchmark MBS yields ripped 32 bps this week to a six-month high 5.79%. Futures are pricing in a 69% probability of a 25-bps hike on June 14th after strong PCE and durable goods data Friday. It has been seen hardest on USD/JPY, accelerating with … Continue reading “Forex Traders Weekly Outlook – Repricing of Fed Hikes Higher for Longer Pumps U.S. Dollar”
Bond Traders Weekly Outlook: Two Year Rates Jump in U.S., U.K and E.U on Inflation Fears
U.S. Treasuries ended the week lower as yields on short-term government debt in the US, UK and eurozone have begun to rise again anticipating more prolonged rate increases to contend with price rises. Rate hike expectations continued growing with the fed funds futures market now showing a 66.5% implied likelihood of another 25-bps increase in June, up from 17.4% a week ago. In the U.K. two-year gilts had one of the biggest weekly falls in 20 years. The entire Treasury … Continue reading “Bond Traders Weekly Outlook: Two Year Rates Jump in U.S., U.K and E.U on Inflation Fears”
Forex Traders Weekly Outlook – U.S. Dollar Strengthens against BRICs and Yen, Commodity Currencies Rise
The U.S. dollar closed mixed this week with more Debt Ceiling shenanigans, the USD strongest against the BRIC currencies and the yen +1.51% and weakest against the Kiwi – 1.37%. Gold meanwhile fell another 1.67% this week. Overall, the dollar index (DXY) rose by 0.47%. Over the past few weeks, the Greenback has rebounded after being down about 8.5% from a peak last September, as measured by the US Dollar index or the WSJ Dollar Index. The Chinese Yuan has … Continue reading “Forex Traders Weekly Outlook – U.S. Dollar Strengthens against BRICs and Yen, Commodity Currencies Rise”
Bond Traders Weekly Outlook: Two Year Note Compresses 2s10s Spread Further
U.S. Treasuries ended the week mixed with the sixth consecutive loss for the 5-yr note through to longer tenors. Treasury yields moving lower in response to debt ceiling and regional bank worries. This week’s fall was paced by shorter tenors keeping the yield curve under pressure, compressing the 2s10s spread by six basis points for the second consecutive week, to -58 bps. The US 2-year yield rose 29 basis points on the week trading at 4.27%. The high yield reached … Continue reading “Bond Traders Weekly Outlook: Two Year Note Compresses 2s10s Spread Further”
Commodity Traders Weekly Outlook: Natural Gas on Fire, Grains Sell Off
For the second week natural gas led the commodities pile, continuing its recover surging over 14% for the week. Grains again were the week’s biggest losers with Canola, rice, corn, soybeans beans and meal all down over 5% on the week. Last week’s WASDE report impacting prices again. Both gold and silver ran continued lower but did bounce late Friday to mitigate much of the damage as the debt ceiling hopes faded. The move was influenced by the US dollar strengthening … Continue reading “Commodity Traders Weekly Outlook: Natural Gas on Fire, Grains Sell Off”
Forex Traders Weekly Outlook – U.S. Dollar Attracts Safe Haven Flows, Commodity Currencies Sell Off
The U.S. dollar roared to life this week after being down about 8.5% from a peak last September, as measured by the US Dollar index or the WSJ Dollar Index. Yields were higher after higher inflation expectations from the University of Michigan Consumer survey an debt ceiling angst led to a flight to safety flow into the dollar. The shift saw a number of currencies break down; the commodity currencies the weakest. The South African Rand and the Australian, Candian … Continue reading “Forex Traders Weekly Outlook – U.S. Dollar Attracts Safe Haven Flows, Commodity Currencies Sell Off”
Commodity Traders Weekly Outlook: Natural Gas Recover, Orange Juice and Silver Sell Off
Natural gas saw some relief this week recovering some of the prior week’s constant selling to close up 0ver 6% for the week. Soybean oil, Silver and OJ futures were the week’s biggest losers. The WASDE report saw volatility amongst the grain which had been up ahead of the release. Both gold and silver ran out of gas, pulling back hard after heavy spec buying took profit. The move was influenced by the US dollar strengthening on safe haven buying. The … Continue reading “Commodity Traders Weekly Outlook: Natural Gas Recover, Orange Juice and Silver Sell Off”
Bond Traders Weekly Outlook: Two Year Note Underperforms After Stellar Treasury Auction Week
U.S. Treasuries ended the week lower, giving back their gains from earlier in the week. Friday’s retreat left yields on 10s and 30s little changed for the week while the 2-yr note underperformed. The 2-yr Treasury note yield rose seven basis points to 3.98% this week and the 10-yr note yield rose one basis point to 3.46%. The 2s10s spread compressed by six basis points to -52 bps. The U.S. Treasuries auction were all strong this week. A $21 billion … Continue reading “Bond Traders Weekly Outlook: Two Year Note Underperforms After Stellar Treasury Auction Week”
Forex Traders Weekly Outlook – Banking System, Fed Terminal Rate & Debt Default Weigh on Dollar
The U.S. dollar has fallen about 8.5% from a peak last September, as measured by the US Dollar index or the WSJ Dollar Index. The dollar’s consolidation through Q1 has given way to renewed losses as investors focus more intently on reduced support for the USD from yield and growth differentials. European growth momentum is building as the impact of the Ukraine war eases. It has been its worst start for the dollar to the year since 2018 with the … Continue reading “Forex Traders Weekly Outlook – Banking System, Fed Terminal Rate & Debt Default Weigh on Dollar”