The Wednesday HOT TAKE
December 18
What’s HOT
HOT Take
Love it or hate it, at least you get in honest here.
As usual, I started out typing one direction today and ended up sending something that is completely different.
At least it is timely!
HOT Streak
The US dollar index rallied above 108 for the first time in more than two years today after the Fed cut rates by a quarter point this afternoon and dialed-back its rate cut expectations for 2025.
The dollar has now rallied 6.5% thus far in 2024 leaving a host of other currencies in its dust, including the Brazilian real which has lost an astounding 22.6% this year, making new all-time lows today.
The real’s continued depreciation is a combination of a strengthening US dollar and deteriorating economic conditions in the largest soy producing and exporting country.
The real’s slide continues to buoy soybean prices paid to the Brazilian farmer as currency weakness has moved in near lockstep with the board’s collapse.
Year-to-date nearby soybean futures are down 27% (($3.50) in dollars, but only 5% in Brazilian real (50 cents).
In other words, the real’s currency depreciation alone has offset $3.00 in board losses for the Brazilian producer.
To be continued…
4pm update - make sure you get to the bottom of this update because a few things have changed in the last hour!
Yesterday, Congress unveiled a stopgap measure to keep federal agencies funded through March 14. If the bill makes it through the House, it will head to the Senate then President Biden’s desk to be signed into law.
Known as a “continuing resolution,” this bill averts a partial government shutdown that would otherwise begin on Saturday, with means to keep the $6.2T federal budget running at its current level, in addition to a cornucopia of other things thrown in for good measure.
(unfortunately) This is commonplace in a lame-duck session (post-election, pre-changing of the guard in Congress) where bills that should only be serving the purpose of averting a government shutdown are packed with otherwise non-essential extras.
Things included in the current continuing resolution:
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