Close: London Session | Forex, Metals, Oil, Agriculture March 08, 2021



Over two decades ago Jay got his start at the Kansas City Board of Trade in the Wheat Futures pit.


FOREX: The U.S. dollar gained, climbing towards a 3-1/2-month high, as a broad rise in Treasury yields spooked investor sentiment in stock markets. Another boost to growth prospects, yields, and the dollar came from the Senate, which approved a modified version of President Joe Biden’s coronavirus relief package. But if the US dollar continues to rise against other currencies, the downtrend for the USD/CAD will likely end as well. The main downside driver for the pair has been the rise in US yields, which has been boosting the dollar.
BEFORE THE BELL Futures for Canada’s main stock index fell, tracking weaker bullion as the U.S. dollar firmed. The USD/CAD has so far resisted the US dollar’s pressure because of rising oil prices (Canada’s major export commodity). Gold prices retreated as the dollar firmed, denting bullion’s appeal. We believe fiscal policy will be more important than monetary policy for the euro area inflation outlook going forward.
The US dollar is riding higher against nearly all the world’s currencies today. The Bloomberg Dollar Index bottomed January 6, the day after the vote.Less appreciated, perhaps, are the monetary implications of the Georgia vote.


The news not only sent oil prices to a fresh 12-month high, but also boosted gold prices due to rising geopolitical uncertainties in the Persian Gulf area. The Gold Analyst offers quality technical and fundamental analysis of the price of gold to help educate readers in their investment decisions. less Gold prices bounced from a 9-month low and traded modestly higher during the APAC session on Monday after Senate Democrats passed the US$ 1.9 trillion Covid relief package.
Note that gold prices have fallen sharply this year, hurt by optimism over a robust economic recovery and a faster-than-anticipated rise in bond yields. On MCX, gold futures were flat at near 10-month lows of Rs 44,731 per 10 grams while silver futures rose 1.3% to Rs 66,465 per kg. Gold prices for the latest contract on MCX are trading down by 0.6% at Rs 44,403 per 10 grams. less Gold prices bounced back from a nine-month low after the divided U.S. Senate passed the $1.9 trillion COVID-relief bill on Saturday.
Gold prices are trading down by 0.2% at Rs 44,615 per 10 grams. Even with the recent volatility in prices, gold remains among the best-performing commodities this year to combat the fallout from the coronavirus pandemic. Real yields exhibit a historically negative correlation with gold prices, and their inverse relationship can be visualized in the graph below.


Oil prices pared gains after earlier climbing above $70 a barrel for the first time since the COVID-19 pandemic began after attacks on Saudi Arabian oil facilities. Saudi seaborne crude exports for last week were seen at 43.6 million bbl (6.2 million bpd) compared to the revised 30.4 million bbl (4.3 million bpd) the week prior. Shipment of crude oil in January and February is equivalent to 11.08 million barrels per day (bpd), according to data published on Sunday by the General Administration of Customs.
With stimulus hopes rising and the re-opening trade underway, the crude oil market should continue to get a bid. Stocks like the cyclicals, financials, and especially old-line oil and gas companies have had an impressive run as investors anticipate increased demand as a result of economic recovery. Well, suppose you are closely following the developments in the crude oil market. The data exclude trader positions in the NYMEX financial crude oil futures contract, which is normally included in our aggregate calculations.
Brent oil surged above $70 a barrel for the first time since the COVID-19 pandemic began.
Daily Market Update identifies accurate price targets and turning points for indices, forex, cryptocurrencies, commodities, oil, gas, and stocks. Besides, there seems to be rising demand for safety after Saudi Arabia’s key oil facility in the Ras Tanura export terminal was attacked by a drone.

United States

So far this year, the 10-year yield has soared 72% Fed Chair Jay Powell’s statement that inflation could “temporarily return” did not help matters much last week either. US stock futures are trading lower today indicating a negative opening for Wall Street indices with Dow Futures trading down by 76 points (down 0.3%). This suggests expectations that a rise in inflation will be followed by the Fed taking action and bringing inflation back toward the target over the longer term.
Therefore, some critics argue that the new round of fiscal stimulus will lead to the economy overheating and inflation shooting much higher than the Fed wants. (see New Fed Chairman, Same Old Story) Currently, comments by Jerome Powell last week regarding inflation and its effects spooked some investors and analysts. As we can see from the percentage of Nasdaq stocks trading above their 10-DMA, the oversold conditions resolved higher, but still in consolidation territory.
When the company reports results Wednesday afternoon, Wall Street expects revenue of $10 billion for the quarter ended in February, up nearly 3% year over year. “Specs piled into shorts across the curve last week as the market became agitated on Fed tapering and early hiking risks,” Zhao wrote Friday. If the gap begins to decline due to rising five-year real yields, that would suggest investors expect faster rate increases from the Fed. In the Fed s Beige Book report released last week, the central bank mentions the word shortage or shortages 31 times, the most going back at least a decade.


Given Beijing’s penchant for using trade as a way to express its disapproval, the situation will be closely monitored. Separately, citing pests, Beijing announced a ban on imports of pineapples from Taiwan.


Export block | Italy has blocked a shipment of the AstraZeneca s coronavirus vaccine to Australia, using a recently introduced EU regulation for the first time. The market anticipates that ECB data will show stepped-up purchases last week.