Fed lowers interest rates, commodity markets brighten.

Global commodity markets rallied after the Fed lowered interest rates by another 25 basis points, marking the third cut this year.

Money is flowing back into the commodities market as the Fed cuts interest rates. Source: MXV

The decision to bring the federal funds rate to a range of 3.5-3.75% has reinforced expectations of more aggressive easing next year, triggering a return of capital to riskier assets. At the close of trading on December 10th, the MXV-Index rose 0.4% to 2,371 points.

In the agricultural market, selling pressure prevailed, with prices falling in 5 out of 7 commodities. Corn prices dropped by more than 0.8%, falling below $175 per ton due to a less favorable supply and demand outlook.

The U.S. Energy Information Agency (EIA) reported that ethanol production fell by nearly 2%, while ethanol exports plummeted by 45,000 barrels per day.

The European Union's (EU) corn import demand for the 2025–2026 crop year is expected to reach only 7.12 million tons, 20% lower than the same period last year.

Pressure intensified when Argentina announced a reduction in export taxes on many agricultural products, including a drop in the tax on corn to 8.5%. This is seen as a factor in expanding supply from the world's third-largest exporter.

MXV believes the grain market continues to face significant downward pressure due to global supply constraints, particularly for wheat.

7 out of 10 items in the metal group increased in price. Source: MXV

In the metals group, copper prices resumed their upward trend after two sessions of weakness, with the COMEX copper contract edging up 0.6% to $11,802 per ton.

The US Federal Reserve (FED) assessed that the US labor market had slowed down, with the unemployment rate rising, thereby creating room for interest rate cuts. As a result, the US dollar weakened, pushing the DXY down 0.6% to 98.66 points, making dollar-denominated commodities more attractive.

However, MXV noted the risk that the US could impose tariffs on refined copper next year, pushing the amount of copper entering COMEX's storage system to over 403,000 tons, 4.8 times the amount at the beginning of the year, increasing concerns about local shortages.

Source: https://hanoimoi.vn/fed-ha-lai-suat-thi-truong-hang-hoa-khoi-sac-726379.html