With just three auctions to go before the announcement of the opening payout forecast for the 2016-17 season, the auction tomorrow took on extra significance.
A fortnight ago, dairy prices were slightly stronger. The headline index rose 2.1% and whole-milk powder prices were up 1.5%.
GDT prices were still down 12.2% year-to-date and the rebound was much more modest than what had been seen across other commodity markets. For example, oil was up 15.2% year-to-date, having rebounded strongly since mid-February, despite being well down on the levels prevailing for most of last year, he said.
Yesterday's consumer price index inflation was seen as the key domestic event of the week. Inflation came in slightly stronger than market expectations at 0.2% for the March quarter and 0.4% for the year ended March.
The United States quarterly season started to get interesting this week, with close to 100 S&P500 companies scheduled to report.
The season was expected to be the weakest US quarterly reporting period since 2009, while some hoped this week it was as bad as it was going to get, Mr Timms said.
Expectations were little changed from a week ago. Consensus expectations pointed to an 8.3% fall in quarterly earnings per share for the S&P500.
So far, 33 S&P500 companies had reported and it had been a good start to the earnings season.
‘‘However, we have only heard from one materials company and no energy sector companies have reported as yet.''
Top tech companies, including Alphabet, Microsoft, International Business Machines and Intel, report this week, along with a host of consumer names such as Starbucks, Yum Brands and Coca-Cola.
Cautiously optimistic US strategists were pointing to a modest rebound in oil and other commodity prices, a softening US dollar and slow-but-steady growth in the US economy as reasons to expect an improvement in earnings.
The first quarter, should it come in as expected, would mark a third straight quarterly decline in earnings and a fifth straight fall in revenue. Looking ahead, year-on-year comparisons should improve, Mr Timms said.
The European Central Bank would meet on Thursday, although, given the raft of initiatives announced at the previous meeting, it was unlikely to be an eventful meeting this month.
In March, the ECB cut interest rates further into negative territory and announced a number of other supportive initiatives. The ECB cut its main refinancing rate from 0.5% to zero and its deposit rate from (minus) -0.3% to -0.4%.
Late in the week, the release of Performance in Manufacturing Index figures from the US, Europe and Japan were expected. Last month, PMIs were disappointing in all those regions, although activity seemed to have picked up of late and sentiment had probably improved, supported by more stable financial markets, Mr Timms said.
Other economic data to be released in the US this week included the housing market index, housing starts, existing home sales, weekly jobless claims, and the Philadelphia Fed business outlook survey.
