Close: London Session | Forex, Metals, Oil, Agriculture July 20, 2021

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Agriculture

Not only have global spring wheat weather problems grown but flooding rains in Germany and other parts of Europe threaten what was once a great wheat crop. The weather has been a major factor affecting coffee (JO), natural gas (UNG), corn (CORN), soybeans (SOYB), and wheat (WEAT) prices. The U.S. drought is really affecting the major spring wheat areas that also extend into Canada. less Commodity markets have seen some historical volatility lately with crude oil, cotton, and several others seeing massive profit-taking.
This video talks more about weather is affecting the grain market and coffee.

Currencies

less The US dollar calming down could help this market, but the greenback looks very strong as the bond market continues to attract a lot of attention. less Monday’s risk shake-out has seen gold nudge higher, despite ongoing US dollar strength and fears of sticky inflation. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.05 per cent to 92.84. The US Dollar rallied, and real Treasury bond rates fell to new all-time negative lows amid the latest spike in COVID-19 diseases and concerns.
The dollar remains firm against all the major currencies, with the Australian and New Zealand dollars and Norwegian krona continuing to bear the burden and are off around 0.5%. However, in addition to the single European currency, virtually all other risk-sensitive currencies buckled against the dollar yesterday and turned lower. level and its short-term outlook will now be decided by both moves in the US dollar and the overall risk tone in the market.
The local unit opened weak at 74.93 a dollar and touched a low of 74.95 and high of 74.55 during the day. This is causing the dollar to strengthen above some major resistance. The yen continues to be resilient, while the Canadian dollar has steadied.

Metals

Consequently, the fact that gold moved back-and-forth now doesn’t make the forecast for gold bullish. Gold prices edged higher today in Indian markets, pushing prices to near a one-month high. In global markets, gold rates edged higher today as a rebound in Covid-19 cases across the world boosted the safe-haven appeal of the precious metal. After eight months within this correction, gold fell back to an important double low at around US$1,676 in mid and late March.
Since gold prices reached a new all-time high at US$2,075 on August 7th, 2020, the entire precious metal sector has been in a multi-month correction. If gold’s safe-haven status resumes, prices may drift higher but the upside, and the downside, both remain limited ahead of the Fed unless there is another risk event. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Starting from that zone and the low at US$1,750, gold did already recover slightly above the still falling 200-day moving average (US$1,824).
Gold prices for the latest contract on MCX are trading on a flat note today at Rs 48,079 per 10 grams. Before moving to the mining stocks, please note that the back-and-forth trading right after the first move lower is normal for gold.

Oil

The volatility in crude oil and gasoline prices has been clearly reflected in recent years in both the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE). Some investors were betting that a combination of constrained supplies and booming demand would push oil above $100 a barrel for the first time since 2014. Since September, oil had its most significant one-day percentage fall, mirroring weakness in equity markets and reflecting some concerns over global growth.
Yet unless the economy shuts down tomorrow, oil supplies are likely to continue to fall and demand will continue to rise.
Global oil benchmark Brent crude futures rose 0.22 per cent to USD 68.77 per barrel. Bumper profits from recently higher oil and gas prices will make industry subsidies trickier to defend. The market may fret about more barrels from OPEC plus yet is less likely that we’re going to see a return of UN-sanctioned oil. If the UK manages to make this strategy work, then oil markets will surge in mid-August along with other risk assets. Fears of a spike in COVID cases and some restrictions sent global stocks and oil sharply lower.
Oh sure, we again have renewed fears about the Delta variant of COVID 19 and the news for oil is downside risk.

United States

Nasdaq Futures are trading up by 82 points (up 0.6%) while Dow Futures are trading up by 121 points (up 0.4%). Starting with New York Harbor (NYH) ULSD, we see front month ULSD as a differential (diff) to front month NYMEX ULSD at -0.05/cents per gallon (cpg). S&P futures are up 24 points, Dow futures are up 232 points and Nasdaq 100 futures are up 65 points. US stock futures are trading higher today, indicating a positive opening for Wall Street. The US goods deficit with Vietnam was almost $56 bln in 2019 and swelled to nearly $63.5 bln last year.
Powell admits that inflation is well above the Fed’s target, but he still considers it transitory. MEXICO DIESEL IMPORTS: last week saw 956,000 barrels arrive on 6 vessels, all from the US. Today, Wall Street continues to use Zacks research including the Zacks Rank and Zacks Equity Research, which combines the best of quantitative and qualitative analysis. less Yes, balloons were deflating on Wall Street Monday, but they are still in the sky and some of those balloons rose even higher.
Profit-taking might be a simpler reason for the healthy selling after the Nasdaq had soared over 13% from mid-March until last week’s records.

Europe

In the UK, the number of cases per day exceeded 50k, but Boris Johnson, nevertheless, announced the complete abolition of quarantine restrictions, including the mandatory wearing of a mask. Prime Minister Boris Johnson remains on self-isolation after contact with the country’s health minister, diagnosed with the coronavirus last week. But China, Brazil, the U.S. and the European Union have all pledged to do just that by around midcentury.

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