On one hand the Chinese currency debacle has tripped up sentiment, but on the other hand the markets have not shown progressive anxiety, and the shelf-life of the crisis appears fairly short.
Wheat
Global Recovery On the Horizon
We think that a September US rate hike is off the table because of a lack of definitive forward progression in the US jobs sector. The unending Greek saga combined with a rising Dollar has created enough headwinds to keep the Fed on the sidelines until later in the year.
Persistent Improvement in Global Economic Sentiment
As we indicated last week, outside market forces appear to be reaching a zenith, and with the noted letdown in the dollar in June, the hope of sidestepping a financial debacle in Europe, and the promise of ongoing aggressive QE from the ECB, it would not be surprising to see a persistent improvement in global economic sentiment.
A Recovery Unfolding at a Slower Than Expected Pace
The recovery of the US economy continues but at a pace that is disappointing for a variety of markets.
Macroeconomic Conditions Improving; Return to Growth
Macroeconomic conditions are improving, and the Fed Chairman feels confident enough to weigh in with her own “irrational exuberance” moment with respect to equity valuations.
Will the Global Economy Regain Momentum?
We had what appears to have been a watershed moment in financial markets over the last week.
The Outlook for Physical Commodities Might Remain Negative
Without a dose of improved US economic news and a reversal in the Dollar’s uptrend, the outlook for physical commodities might remain negative.
Positive Shift in Demand Prospects
While the latest string of US economic data sparked some concern over growth prospects, there have been a number of bright spots from China and the Euro zone.
Global Economic Condition Remains Suspect
From the recent action in Treasuries, stocks and physical commodities, one could come to the conclusion that the global economic condition remains suspect.
Evidence of US Growth Has Pushed the Dollar Up
The US economy has bulldogged its way to growth in February, despite adverse weather, ongoing energy sector layoffs, adverse foreign exchange rate action and periodic talk of rising US interest rates.