Futures Rise As Luxury Blowout Lifts European Markets; Dollar, Yields Higher

US equity futures advanced to end the week as traders remained fixated on the path of monetary policy while assessing stronger than expected corporate earnings as the season nears its end. Contracts on the S&P 500 rose 0.3% at 8:00 a.m. ET while those on the Nasdaq 100 advanced 0.2%. Swiss luxury-goods maker Richemont soared 7.8% to a record on "spectacular sales growth", fueling a broad rally across European luxury stocks. Risk-on sentiment pushed Treasury yields higher. The Bloomberg dollar index was poised for its biggest weekly gain since March while oil prices declined again, set for their fourth weekly loss. Meanwhile, gold is also on course to end the week lower. Iron ore futures are falling sharply for a second day, but still on track for a weekly gain.

In premarket trading, Tesla rose 2% after the electric-car maker raised prices of its Model X and Model S cars in the US, the third change in less than a month, while Musk announced that Twitter would have a new CEO in 6 weeks.

Amylyx Pharmaceuticals shares gain 7.5% after the drugmaker’s sales of its amyotrophic lateral sclerosis drug topped analyst estimates.
ARS Pharmaceuticals surges 65% after saying an FDA panel voted to to support a favorable benefit-risk assessment for Neffy to treat severe allergic reaction.
Blue Bird Corp. soars 31% after the company boosted its revenue and adjusted Ebitda forecast for the full year.
Cidara Therapeutics rises 11% as Cantor Fitzgerald flagged multiple catalysts.
Fox Corp. falls 1.8% as Wells Fargo cut the recommendation on the media company’s stock to equal-weight, saying there’s some strategic uncertainty ahead.
IonQ drops 10% after the software company posted first-quarter results.
Sarepta Therapeutics stock is halted for pending news, while the company’s drug candidate for Duchenne muscular dystrophy is set to face an FDA advisory committee meeting on Friday.
SiriusPoint Ltd. falls 15% after Dan Loeb said he’s no longer exploring an acquisition of the company.
CuriosityStream shares advanced in extended trading on Thursday, after the entertainment company reported its first-quarter results and gave an outlook.

S&P 500 futures traded higher after President Joe Biden and House Speaker Kevin McCarthy postponed a meeting on the debt ceiling that was planned for Friday. The delay reflects headway in staff-level discussions, Bloomberg reported citing people familiar with the talks, however a more realistic take came from Punchbowl which said that "the two sides haven’t narrowed down the policies they might want to include in a debt-limit or spending-cut package."

“We believe that they will find a deal — we need to remember negotiations have only just started,” said Marie Jacot-Cardoen, chief executive officer of Edmond de Rothschild Asset Management France, on Bloomberg Television. “It is likely political antagonism will increase before deal is reached, but we believe a compromise will be found.”

US equities have been mainly trading in a very tight range all month after climbing over the past two amid concerns of a recession and uncertainty surrounding the path of interest rates. Earnings have been better than expected but did little to lift the S&P 500 after they rallied ahead of the season. Investors are also worried about the US debt-ceiling and stability of the banking industry, though efforts to repair ties between Washington and Beijing have been supportive.

“The breadth of the US equity market has fallen to multi-decade lows, masking the weaker performance and lower investor conviction in smaller constituents,” said Mark Haefele, chief investment officer of UBS Global Wealth Management. “This suggests crowding and vulnerability, as narrow equity market breadth historically happens in the later stages of a bull market.”

Meanwhile, BofA's Michael Hartnett said a prolonged period of economic decline in the US will roil technology stocks at a time when they are attracting a weight of investor money. They expect a recession “to crack credit and tech” just as it did in 2008.

Elsewhere, investors remained focused on what major central banks will do next in their rate-hiking campaigns to quell inflation. US data Thursday showed initial jobless claims reached the highest since October 2021 while producer prices rose less than economists expected, suggesting Federal Reserve policy tightening may finally be having an effect.

“There’s a chink of light — inflation is beginning to show some signs of easing, boosting hopes the Fed’s rate hiking cycle is near an end and this means companies can start prioritizing growth, rather than servicing debt,” said Angeline Ong, a financial analyst at IG Group.

Luxury goods maker Richemont gained 7.8% to a record, fueling a broad rally across European luxury stocks. Europeans stocks are ahead and on course to finish the week in the green as investors welcome signs of easing strains between the US and China and tentative progress in the debt-ceiling negotiations. The Stoxx 600 is up 0.6% with consumer products, financial services and retailers the strongest-performing sectors while retail and autos fall. Here are the most notable European movers:

Richemont shares rise as much as 5.6%, hitting a record high, after reporting forecast-beating sales growth and operating profit. Its jewelery division showed “spectacular sales growth,” driving significant improvement in profitability, Vontobel said. Other luxury stocks also gained, with LVMH rising 1.5%
Scor shares rose as much as 11% after a strong set of results, with a significant net income beat driven by better performance in both L&H and P&C
GSK shares rise as much as 1.7% after the UK pharma group £804 million sells a stake in Haleon, the consumer health- care division it spun off as a separate company last year. It also welcomed Zantac class action dismissal in British Columbia.
Beazley shares rise as much as 6.5%, hitting the highest since March 31, after the British insurer’s quarterly results topped expectations for premium growth, while investment income also increased.
THG shares drop as much as 23%, after the UK online retailer ended talks with Apollo about an indicative takeover proposal.
Soitec shares tumble as much as 9.8%, after JPMorgan downgraded the stock to underweight from neutral and almost halved its price target, noting the wafer maker’s fiscal 2024 outlook was at risk of a slow recovery in demand for chips used in smartphones.
Accor falls as much as 3.2% in Paris after an offering of 7m shares priced at €31.81 apiece by holder Qatar Holding via BofA Securities, according to terms seen by Bloomberg.
Nordex shares drop as much as 5.6% after the German wind turbine maker reported results that analysts said were disappointing, noting a larger-than-expected loss driven by liquidated damages and extra catch-up costs from the delays in the winter.

Earlier in the session, Asian stocks headed for a fourth day of decline, as Chinese shares pulled back further after the nation’s weak inflation and borrowing data showed the economic recovery is waning, adding to growth concerns globally. The MSCI Asia Pacific dropped as much as 0.3% Friday, led lower by material and energy shares. Chinese and Hong Kong benchmarks led declines in the region as traders fret over the slew of worse-than-expected economic data, which underscores ongoing problems in the housing market and sluggish domestic demand after Covid reopening. Chinese tech stocks bucked the broader market’s trend after e-commerce firm JD.com reported better-than-expected results, and geopolitical concerns eased on the news of a meeting between Biden and Xi. US National Security Adviser Jake Sullivan also met with China’s top diplomat Wang Yi.

Meanwhile, Japanese shares outperformed the region as investors welcomed another wave of quarterly results from domestic companies. Companies including Honda and KDDI that announced buybacks along with earnings were among the biggest boosts. The Topix rose 0.6% to close at 2,096.39, while the Nikkei advanced 0.9% to 29,388.30. Keyence Corp. contributed the most to the Topix gain, increasing 2.7%. Out of 2,159 stocks in the index, 1,197 rose and 867 fell, while 95 were unchanged. In addition to the decline in U.S. long-term Treasury yields overnight, “the Japanese market is also benefiting from the sense of undervaluation of Japanese stocks,” said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank

The Asian stock benchmark was poised for a weekly drop amid weaker global growth and a resurgence of banking sector worries. Still, a cooling US job market and softening producer prices added confidence that the Federal Reserve may soon end its tightening campaign. “The Fed is easily positioned to hold rates at the June meeting and if we see further softening of labor conditions, that will continue to drive this market into pricing in easing before the end of the year,” said Ed Moya, senior market analyst at Oanda

Indian stocks closed the week as one of Asia’s best performers, aided by strong buying from overseas investors. Foreign investors bought net $1.1 billion of local equities this week through Thursday, NSDL data showed. The buying comes amid economic resilience and signs that the central bank will stay on hold as inflation moderates. For the week, the BSE-Sensex climbed 1.6% compared to MSCI Asia-Pacific index’s 0.4% loss. Sensex outperformed markets in China, Japan, Australia during the week. On Friday, the S&P BSE Sensex rose 0.2% to 62,027.90 in Mumbai, while the NSE Nifty 50 Index advanced 0.1% to 18,314.80.

Australian stocks edged higher sending the S&P/ASX 200 index up 0.1% to close at 7,256.70, boosted by banks and health shares. The benchmark gained 0.5% for the week, snapping three weeks of declines. Asian stocks were mixed and Treasuries held gains as investors weighed signs of cooling in the American jobs market and efforts to repair ties between Washington and Beijing.

Treasuries are lower with the US 10-year yield rising 2bps to 3.41% Bunds and Gilts have also declined with 10-year borrowing costs in Germany and the UK rising by 1bps and 2bps respectively.

In FX, the Bloomberg Dollar Spot Index is up 0.1% and was set to rise 0.5% this week, the most since the week ended March 10 even as traders weigh the likelihood of a Federal Reserve policy pivot following a soft US inflation report. The Kiwi dollar is the clear underperformer, falling 1% versus the greenback after New Zealand inflation expectations fell. “For the dollar, we are not quite at the tipping point where markets can plausibly expect that the Fed will weigh up steady versus rate cut,” said Sean Callow, senior currency strategist at Westpac Banking Corp. “That probably means ranges on BBDXY hold for now, even if we prefer selling rallies than buying dips”

EUR/USD slips 0.1% to 1.0907; it is set to lose 1% this week, its worst performance in nearly two months after a broad rally in the dollar on Thursday knocked most G10 currencies and boosted the dollar
GBP/USD edges up 0.2% to 1.2532; the pound brushes off a weaker-than-expected reading of UK GDP
USD/JPY rises 0.2% to 134.76
NZD/USD fell 1.1% to 0.6232, extending losses after the nation’s two-year inflation expectations eased to within the Reserve Bank’s target band
AUD/USD dropped 0.2% to 0.6688, weighed in part by kiwi sales

In rates, treasuries drifted lower during the London session, after Fed’s Bowman said more hikes will be needed if inflation stays too high. Treasuries cheaper by up to 4bp across long-end of the curve with 2s10s spread steeper by ~2bp on the day; 10-year yields around 3.42%. Stronger S&P 500 futures also added to cheapening pressure on Treasury yields. Bunds were also lower after European Central Bank policymaker Luis de Guindos said more hikes may be possible. IG issuance slate empty so far; two names priced deals Thursday while at least three issuers were said to have stood down due to market conditions.

In commodities, crude futures decline with WTI falling 0.6% to trade near $70.45. Spot gold drops 0.4% to around $2,006.

Bitcoin is softer on the session and nearing the USD 26k mark with newsflow generally light after a busy macro week ahead of a relatively busy US session. Action which keeps Bitcoin just above the earlier WTD trough.

To the day ahead now, and data releases include the UK GDP reading for Q1, along with the University of Michigan’s preliminary consumer sentiment index for May. Otherwise, central bank speakers include ECB Vice President de Guindos, BoE Chief Economist Pill and the Fed’s Daly, Bullard and Jefferson.

Market Snapshot

S&P 500 futures up 0.4% to 4,160.00
MXAP down 0.2% to 161.24
MXAPJ down 0.6% to 511.37
Nikkei up 0.9% to 29,388.30
Topix up 0.6% to 2,096.39
Hang Seng Index down 0.6% to 19,627.24
Shanghai Composite down 1.1% to 3,272.36
Sensex up 0.3% to 62,098.69
Australia S&P/ASX 200 little changed at 7,256.65
Kospi down 0.6% to 2,475.42
STOXX Europe 600 up 0.6% to 466.41
German 10Y yield little changed at 2.24%
Euro little changed at $1.0911
Brent Futures down 0.3% to $74.76/bbl
Gold spot down 0.4% to $2,007.55
U.S. Dollar Index little changed at 102.08

Top Overnight News from Bloomberg

China will send a special envoy on a trip to Ukraine, Russia, Poland, France, and Germany as of Mon as the gov’t works to help foster a peace agreement. SCMP
Turkish presidential candidate Ince drops out of the race, raising the odds of Erdogan being voted out of office this Sunday . FT
The European Central Bank may have to continue raising borrowing costs beyond the summer, according to Governing Council member Joachim Nagel. BBG
UK economic data for March is mixed, with soft GDP but better-than-anticipated industrial and manufacturing production. RTRS
Janet Yellen reiterated the only good outcome in the debt standoff is for Congress to raise the ceiling. Global markets and US households and businesses need to see "we have a Congress that is committed to paying the bills. . . . That we're not a deadbeat country," she told Bloomberg at a G-7 meeting in Japan. BBG
Fed’s Bowman warns the central bank should be prepared to continue hiking rates as employment and inflation are still too hot. WSJ
If the U.S. defaults on its debt and is unable to pay all its bills this summer, the pain will fall squarely on the defense industry. National security is by far the largest category of discretionary federal spending, with budgets rising over the past two years to counter China’s military expansion and tackle the conflict in Ukraine. WSJ
NBCUniversal’s head of advertising, Linda Yaccarino, is in talks to become the new CEO of Twitter, according to people familiar with the situation. WSJ
Tesla raised prices of its vehicles in the US, the third change in less than a month, adding $1,000 to Model X and Model S base and plaid cars. It also recalled some 1.1 million cars in China — almost every EV it's ever sold there — over a defect with their acceleration systems. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly lower amid a busy slate of earnings releases and after the subdued performance stateside where regional bank fears resurfaced and initial jobless claims disappointed. ASX 200 was lacklustre with the index constrained by weakness in the energy and mining-related sectors after the recent pressure in underlying commodity prices. Nikkei 225 outperformed and rose to its highest since November 2021 with price action largely driven by earnings results including various blue-chip stocks. Hang Seng and Shanghai Comp. were indecisive as talks between US National Security Adviser Sullivan and China's top diplomat Wang Yi provided some encouragement towards a potential Biden-Xi call, although participants also digested weaker-than-expected Chinese loans and financing data.

Top Asian News

Chinese Foreign Minister Qin Gang is to visit Australia in July for a reciprocal visit as ties between Australia and China ease, according to SCMP.
EU Economic Commissioner Gentiloni said we cannot be too dependent on foreign powers and noted that decoupling would be a dangerous risk for the global economy, while he added that he is not talking about closing the trade with China but is instead talking about making supply chains more secure.

European bourses are firmer across the board, Euro Stoxx 50 +0.5%, with the Stoxx 600 set to end the week roughly where it commenced it. Sectors are primarily in the green with Consumer Products/Services outperforming post-Richemont's (+5.0%) FY update while Real Estate/Autos lag. The APAC handover was a mixed one with sentiment inching higher since though with no clear driver/firm narrative behind this. Stateside, ES +0.2%, futures are bid but only modestly so as we await data and more Fed speak after Bowman's early-doors commentary while Yellen provided familiar lines on the debt ceiling. Tesla (TSLA) to recall a total of 1,104,622 of imported Model S, Model X, Model 3 and domestic Model 3 and Model Y, according to Chinese market regulator. Elsewhere, WSJ said NBCUniversal's head of advertising Linda Yaccarino was the candidate in talks to become the new CEO of Twitter.

Top European News

Riksbank's Thedeen says he is surprised as their rate increases have not "bitten" as he expected, the impact on the economy has not been that great, via SvD Näringsliv. "every time we have presented a new interest rate forecast; we have later revised it upwards... It is a sign that monetary policy may not have the desired effect as we have thought." One explanation for why household consumption continues to be above expectations is their belief that rates will soon decrease rapidly. On QE, says he is somewhat "more sceptical" than perhaps some others have been, should be a "relatively high" threshold for implementing it.
Northvolt investment within Germany reportedly to be circa. EUR 3-5bln with hundreds of millions expected in subsidies, via Reuters citing sources. *Follows earlier source reports in the FT and commentary from German officials who suggested that no details have been decided on yet.

Buck broadly underpinned as DXY fastens grip on 102.000 handle and Fed's Bowman says recent CPI and NFP reports do not provide persistent evidence of disinflation.
Kiwi undermined by much cooler NZ inflation expectations, NZD/USD sub-0.6250 from just above 0.6300, AUD/NZD cross tops 1.0700 vs 1.0640 low.
Yen and Loonie soft against Greenback, but eyeing decent option expiry interest at 135.00 and 1.3500 for support.
Pound retains 1.2500+ status despite monthly UK GDP contraction pre-BoE's Pill and Euro treading water near 1.0900 irrespective of more hawkish ECB commentary.
PBoC set USD/CNY mid-point at 6.9481 vs exp. 6.9472 (prev. 6.9101)

Fixed Income

Bonds chop and churn after extending recovery gains to new w-t-d highs on Thursday.
Bunds pivot 136.50 and 2.25% yield, Gilt veer towards base of 101.14-68 range and T-note hovers just under 116-00 within 116-07/115-28 confines ahead of more Central Bank speakers, US import/export prices and UoM sentiment

Commodities

Crude benchmarks are flat after spending the morning slightly softer and only picking up incrementally most recently with no fresh driver behind the move at the time and action overall in familiar ranges.
Iraqi oil minister says Iraq didn't get a reply from Turkish Botas on the request to resume oil flow, expects Northern Oil exports to restart on Saturday with pumping of 500,000 barrels per day.
Spot gold resides around this week’s lows, and just above the USD 2,000/oz level following yesterday's advances in the Dollar index, whilst fresh macro new flows remain light; base metals mixed, overall.
Turkish Defence Minister says parties to the Black Sea grain deal are approaching an agreement on an extension. Subsequently, Russian Kremlin says nothing new to report, for now, after Black Sea grain deal talks in Istanbul; potential conversation with Turkey's Erdogan and Russia's Putin won't help achieve a deal.

Geopolitics

China's foreign ministry says China representative of Eurasian affairs to visit Ukraine, Poland, France, Germany and Russia from May 15th to promote peace.
Israeli PM Netanyahu will hold a security consultation session shortly with senior security chiefs, according to Al Jazeera.
From the EU-China strategy paper, WSJ's Norman highlights that "EU-China relations will not develop if China does not push Russia to withdraw from Ukraine..."

US Event Calendar

08:30: April Import Price Index YoY, est. -4.8%, prior -4.6%; MoM, est. 0.3%, prior -0.6%
- April Export Price Index YoY, est. -5.5%, prior -4.8%; MoM, est. 0.2%, prior -0.3%
10:00: May U. of Mich. Expectations, est. 60.8, prior 60.5
- May U. of Mich. Sentiment, est. 63.0, prior 63.5
- May U. of Mich. Current Conditions, est. 67.5, prior 68.2
- May U. of Mich. 1 Yr Inflation, est. 4.4%, prior 4.6%
- May U. of Mich. 5-10 Yr Inflation, est. 2.9%, prior 3.0%
14:20: Fed’s Daly Gives Commencement Speech
19:45: Fed’s Bullard and Jefferson Take Part in Panel Discussion

DB's Jim Reid concludes the overnight wrap

Today is an important one, since at lunchtime I have a slot to purchase tickets for the Paris Olympics in 2024. I honestly don't know what will still be available by the time I'm allowed to log on, but last night my wife and I held a strategy meeting to decide what to aim for. First choice is the 100m final, followed by other nights of athletics. Other events were then suggested, but if they're also taken we're then into the danger zone where I've been instructed to use 'common sense' among the alternatives. I can only hope we're still on speaking terms by this evening. Check back with me this time next year to find out my new favorite sport.

Markets failed to race away yesterday, as renewed fears of a slowdown led to a decent risk-off move, with investors growing concerned about weak data releases, the US debt ceiling, as well as the ongoing situation with regional banks. That meant the S&P 500 (-0.17%) lost ground, whilst sovereign bonds benefited from the flight to safety as speculation mounted about central bank rate cuts in response. These moves were evident across several asset classes, and the jitters also saw the US Dollar Index (+0.58%) record its best daily performance in six weeks.

Starting with the data, there was disappointment in the US from the weekly initial jobless claims, which came in at 264k (vs. 245k expected) in the week ending May 6. That’s their highest level since October 2021, and whilst we should add the usual caveats about not over-interpreting a single data point, it’s worth noting that claims have been on a broadly upward trend since late January. So that adds to the signs that the labour market has been softening in recent months, such as the decline in the number of job openings as well as the quits rate.

Alongside jobless claims, yesterday also saw the release of the US PPI release for April. That came in slightly beneath expectations, with headline PPI only up by a monthly +0.2% (vs. +0.3% expected), which took the annual measure down to +2.3% (vs. +2.5% expected). That added to the sense from the previous day’s CPI release that inflation might durably be heading lower, which could support a pivot towards rate cuts later in the year.

Those data releases supported a sovereign bond rally yesterday, with yields on 10yr Treasuries down -5.8bps to 3.375%. The 1m T-bill yield was just lower than unchanged at -0.08bps at 5.450%, but intraday the rate rose as high as 5.48% at one point and continues to see a good deal of intraday volatility. That maturity is exposed to potential debt ceiling default risk, which demonstrates how investors are positioning in case there are issues ahead. In terms of the latest on the debt ceiling, last night it was announced that President Biden and congressional leaders had postponed their planned meeting today until early next week. According to a Bloomberg report last night, the delay was due to conversations on government spending and energy permit reform gaining traction, so at first glance it signals that progress is being made. Our credit team put out a note yesterday (link here) that outlines the potential impact the debt ceiling can have on credit market and our spread forecast.

For equities, the generally downbeat newsflow meant that the major indices lost ground, with the S&P 500 ending the session -0.17% lower. The main outperformer were the megacap tech stocks, which benefited from the prospect of lower interest rates. In fact, the FANG+ index advanced another +0.90% to a fresh one-year high, which brings its YTD gains to a sizeable +44.52% already. On the other hand, banks continued to struggle and the KBW Banks Index fell a further -1.25%, closing less than 2% above its low from last week.

Here in the UK, the focus was on the Bank of England yesterday, who announced another 25bp hike that took Bank Rate up to a post-2008 high of 4.5%. Seven of the nine committee members voted for the move, and the minutes said that for those members, “there had been repeated surprises about the resilience of demand, while the labour market had remained tight.” There were also significant upward revisions to the BoE’s growth projections, and unlike in February they are no longer forecasting a recession. Nevertheless, growth was still expected to be weak by historic standards, at just ¼% in 2023, and then ¾% in 2024 and 2025. Looking forward, our UK economist writes in his recap note (link here) that another hike in June is more likely than not. That’s in line with current market expectations, and this morning investors are pricing in a 78% chance of a 25bp hike in June.

Staying on central banks, there was an interesting release yesterday as the ECB published their Consumer Expectations Survey for March. That showed inflation expectations were moving higher again after their recent decline, with the 1yr expectation up to +5.0%, and the 3yr expectation up to +2.9%. We also heard from Bundesbank President Nagel, who held the door open to the prospect that the ECB might still be hiking in September, by saying that “there’s nothing off the table” for that meeting. And President Lagarde herself reiterated that the ECB’s fight against inflation “is not over”. Despite of the hawkish tones from ECB officials however, European markets traded in line with the US for the most part, with yields on 10yr bunds (-6.3bps) coming down, and the STOXX 600 closing unchanged. See our German economists’ latest chartbook as well yesterday for more on the economic situation there (link here).

Overnight in Asia, equities have put in a mixed performance this morning amidst competing signals on the state of the global economy. On the one hand, the CSI (-0.59%), the Shanghai Composite (-0.39%), the KOSPI (-0.32%) and the Hang Seng (-0.13%) are trading lower. However, the Nikkei (+0.86%) has posted a decent advance that’s taken the index to its highest level since November 2021. One factor helping to support sentiment has been the meeting between US National Security Adviser Jake Sullivan and China’s top diplomat Wang Yi in Vienna. That was seen as a positive sign that the two sides were trying to ease tensions, and US-listed Chinese stocks on the NASDAQ Golden Dragon China Index (+3.82%) saw their biggest advance in three months yesterday. Looking forward, US equity futures are also in positive territory, with those on the S&P 500 (+0.20%) and NASDAQ 100 (+0.30%) pointing higher.

Since this is the last edition before the weekend, one thing to keep an eye on will be the Turkish election that’s taking place on Sunday. Our EM strategists have published a comprehensive preview of the election (link here), where they examine the process, along with what it could mean for the economy, markets, monetary policy and geopolitics. Yesterday saw some further developments in the contest, with presidential candidate Muharrem İnce withdrawing from the election.

Finally, another thing we’ve been watching out for is the prospect of an El Niño this year, which is a warming of sea surface temperatures in the eastern pacific, and is unfortunately correlated with a higher frequency of natural disasters like flooding. Yesterday saw the latest monthly update in the US National Weather Service’s forecast, which now sees a more than 90% chance of an El Niño occurring this winter, as well as a 54% chance of that it will be a strong El Niño (up from 41% last month). If there is an El Niño, then that could have important effects on food prices, as well as many emerging-market economies that would be most impacted by potential changes in weather patterns.

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