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The Federal Reserve cut rates by 50 basis points, starting its easing cycle, and the US dollar weakened. The article notes that commodities, including energy, agriculture and industrial metals, have historically rallied during rate-cut and dollar-weakening periods, and it flags possible Chinese stimulus.
A weaker dollar and lower rates tend to support dollar-priced commodities and firm feed grain and energy prices, while the Chinese stimulus outlook adds demand upside.
cmegroup.comSep 24, 2024After 1,637 past bearish macro events, DXY moved a median -0.2% over 5 sessions (39% higher; middle half -0.6% to +0.3%), and -0.2% over 20.
After 487 past bullish macro events, WTI moved a median +1.0% over 5 sessions (60% higher; middle half -2.0% to +4.0%), and +1.5% over 20.
After 151 past bullish macro events, CORN moved a median +0.2% over 5 sessions (57% higher; middle half -0.9% to +1.4%), and -0.3% over 20.
After 57 past bullish macro events, WHEAT moved a median +0.3% over 5 sessions (65% higher; middle half -0.5% to +1.7%), and -0.7% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
The Fed's 50 bp cut and weaker dollar made US wheat cheaper for foreign buyers and drew fund inflows into commodities.
