Soybeans have traded as much as 58 cents off of Friday’s lows in the early morning session. There has been renewed hope on the trade side of things, not just that China wouldn’t disappear but perhaps even start buying more agricultural products from the United States.
It is now clearer than ever that the Federal Reserve is willing to let inflation run past its 2% target without forcing their hand to hike rates at a faster pace. In other words, don’t bet on a fourth hike this year. What does this mean for stocks? A more dovish than expected Fed is usually supportive.
Most policymakers were optimistic over the economic outlook, and felt it would “soon be appropriate” to raise interest rates if the U.S. outlook remains intact. However, the lack of clarity offered on rate hike timings beyond June simply left most investors empty-handed.
When you pair two weak currencies against each other, what do you get? A sideways chop. That’s exactly what has happened to the Euro/British pound (EUR/GBP) currency pair for the past several months as data from both the Eurozone and the UK have been far from impressive. So far in the first half of 2018, macroeconomic pointers from the Eurozone have been poor with German data being particularly disappointing.
There is nothing like rising gas prices that get politicians finger-pointing in every direction. In politics, when gas prices go up, it is always the other party’s fault. They like to show that they feel your pain at the pump, so much so that they ask their limo drivers how it is impacting their family. Of course, it is kind of funny that when most politicians talk about the reasons for rising gasoline prices; one might wonder if they have ever seen a gas can in their life.
Crude oil prices managed to recover some of their losses made in the immediate aftermath of EIA’s weekly crude inventories report which showed an unexpected build. Both Brent and WTI oil contracts remain near the multi-year highs they have hit recently.
Data from Europe this morning fell short of expectations, but the real catalyst was the Dollar’s mission. First, German GDP, ZEW Sentiment and Eurozone Industrial Production all missed. U.S. Retail Sales missed expectations as well, although last month’s read was revised better.
Matters just continue to go from bad to worse for the Turkish Lira. The currency is in complete freefall and the outlook is still that there is an increased risk of further losses ahead. This is despite the Lira being crippled by meeting new historic lows on a near-daily basis as of late, a consequence of investors having an extreme lack of confidence in Turkish assets.