Close: London Session | Forex, Metals, Oil, Agriculture July 22, 2021

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Agriculture

One such bullish commodity is Coffee futures prices have remained strong and could be headed nearly 25% higher if this warm cup of java decides to heat up again! A coffee futures breakout above this level, could see coffee prices rise to $225… or over 25% higher. Will coffee futures prices continue to perk up and head much higher? Soybean oil prices, an important ingredient for the company’s salad dressing, jumped 20% compared with the first quarter.
Traders are watching for a Coffee futures breakout to new 5 year highs.

Currencies

Thus, a break of 92.50 on the Dollar Index is likely to signal more weakness in the US Dollar at the end of the week and early next week. less The DXY US Dollar Index price regained some of its recent gains overnight as delta nerves weakened amid strong US corporate earnings. The Norwegian krone and Australian dollar lead the majors today, while the euro and Canadian dollar are little changed. The DXY US Dollar Index is hovering at around 3-month highs, exerting downward pressure on commodities.
EURO, EUR/USD, EUROPEAN CENTRAL BANK (ECB), LAGARDE – TALKING POINTS: The Euro has idled even as most of its major counterparts saw violent price moves against the US Dollar. Regional currencies appreciated against the dollar and also lent support to the local unit. The dollar index fell 0.20% to 92.77, where it remains in Asia amid weak regional trading. Looking ahead, traders are eyeing today’s ECB meeting for clues about the bank’s monetary guidance and its ramifications for the US Dollar.
Gold comes under pressure because the dollar is now hovering around the highest in 3-months. Typically, gold moves inversely to the U.S. dollar amid a negative correlation.

Metals

In 2002 when gold was $300 per ounce, MAM recommended to its investors to put 50% of their investment assets into physical gold stored outside the banking system. Last week we noted that the gold stocks were oversold but failed to mount any rally even as Gold had rebounded as much as $80/oz. Big, rapacious, liberty-squelching governments typically hate gold, or at least gold in private hands as money. Since the 1999 bottom, gold was then stabilizing and at the beginning of 2002, we considered that the 20-year correction was over and we bought gold at $300.
The GoldSwitzerland Division was created to facilitate the buying and storage of physical gold and silver for private investors, companies, trusts and pension funds. Future acquisitions will be a lot more costly — which is to say future profits for investors in the best junior gold miners will be a lot higher. A private citizen could buy or rent a piece of land, or stake a claim on vacant land, and keep whatever gold he found for himself.
Gold fever in both California and in the Land Down Under, half a world apart, prompted large numbers of fortune-seekers to migrate and dig up whatever they could find. At the beginning of the 2000s, we decided to invest in physical gold in a substantial way for our own funds and the investors we advised. physical gold is clearly the best combination of wealth preservation and insurance compared to any alternative and that is by a massive margin.

Oil

less Crude oil prices pulled back slightly during Thursday’s APAC session after a strong rally seen a day before. The market expects an EPS of $0.60, and judging by the rally in oil and gas prices in the second quarter, the chances are that BP may exceed that. The EIA reported that U.S. commercial crude oil inventories increased by 2.1 million barrels from the previous week. This cools market expectations for a sustained rise in fuel demand and may weigh on oil prices.
At 439.7 million barrels, U.S. crude oil inventories are about 7% below the five-year average for this time of year. U.S. oil producers are not rising to the occasion and so we’re becoming more and more dependent on foreign oil.
By May end, the continuous contract of crude oil on the Multi Commodity Exchange (MCX) picked up momentum and established a fresh leg of rally. Therefore, movements in the commodity markets, especially in the oil market, are a key driver for BP’s stock price. less BP (BP) delivered strong results in the first quarter of the year, as the price of oil marched higher. Brent crude futures, the global oil benchmark, rose 0.98 to $72.94 per barrel.

United States

Asian stocks climbed today after solid company earnings boosted Wall Street, easing concerns about peak economic growth and coronavirus flareups. The interest rate situation has seen rising interest rates over the last 24 hours, so that does tend to slow down the Nasdaq 100 overall. US stock futures are trading higher today indicating a positive opening for Wall Street indices with Dow Futures trading up by 85 points (up 0.3%). After earning a Finance MBA from New York University, he spent the 1980s on Wall Street as a Eurodollar trader, equity analyst and junk bond analyst.
The US existing home sales increased from 5.80M to 5.86M, failing to reach the 5.89M estimate, while the CB Leading Index increased only by 0.7% versus 0.8% expected. 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. Blink Charging (NASDAQ: BLNK) is one such company that is contributing to the electric revolution before it became mainstream.
Not the least of which was the LTCM/Russian debt default crisis, which was responsible for a 20% drawdown in the NASDAQ 100 (^NDX)—in the context of a bull market! Surprisingly or not, the Greenback is still strong even though the US unemployment Claims increased unexpectedly in the last week. Unheard of in the days when all Wall Street could say was “Buy”.

China

However, it’s extremely likely that the sanctions imposed on Didi will be “harsher” than the $2.8 billion fine imposed on Alibaba by Beijing. Didi might be the last major Chinese IPO, as Beijing demands that domestic firms list domestically, or in Hong Kong.

Europe

One could thus easily argue that for the ECB to be able to raise rates, also financial markets will likely need to price in higher inflation. That is the new ECB forward guidance on rates, the most interesting part of today’s monetary policy announcement. The ECB sought to strengthen its forward guidance but still left itself plenty of discretion regarding future monetary policy decisions. This probably reflects traders’ reluctance to commit one way or another ahead of today’s monetary policy announcement from the ECB.
The ECB has already increased its inflation target to 2 percent having previously aimed just below that level and promised to be “forceful or persistent” in reaching it. Financial markets are not pricing in any near-term rate hikes or inflation hitting the ECB’s target. We expect the ECB to scale down its bond purchases in the autumn, and also see renewed upward pressure on bond yields after the summer. The ECB also needs to see progress in the realized underlying inflation.
In the press conference, Lagarde clarified that well ahead of the end of the forecast horizon means roughly the mid-point of the horizon. The ECB may announce that it will tolerate an inflationary rise that is expected to put price growth north of the target for some time.

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