Market Awaits CPI Data

Rates on 10 year Treasuries remained neutral this morning, resting at the 3.08 level, right on the moving average, as the market braces for CPI data to be released in a little over an hour. Yesterday's PPI data came in stronger than expected at 0.3% for April with food cost increases leading the way.

While the Federal Reserve continues to focus on deflation, paying little attention to inflation, as the daily chart of Soybean futures indicates, some prices are rising sharply. We need to be positioning ourselves for strong moves in the agricultural markets. We have discussed this issue and how to position yourself in recent Trendsetter issues.

How the market reacts to today's data release is uncertain but it's important to note the rising trend in interest rates as well as strong price increases in commodities.