Close: London Session | Forex, Metals, Oil, Agriculture November 02, 2020



With demand already weak, cold weather ahead, and corn prices moving higher, I see earnings pressure ahead. However, sales of some segments including coffee, baking products, and prepared foods accelerated in Q3, which can lead to further acceleration and recovery in Q4. This also as the government probes both China’s suspension of imports of Australian coal and possibly fiber used by Chinese cotton mills. Over two decades ago Jay got his start at the Kansas City Board of Trade in the Wheat Futures pit.


In my previous article, I warned that a strong Dollar and fragile oil prices could hurt risk sentiment.The US Presidential elections have been slated as an event risk. The Australian dollar traded a little below $0.7000 for the first time since late July. The US dollar will continue to form GBP/USD price action this week with tomorrow’s US presidential elections the main driver. The Dollar (UUP) has since rebounded against its peers, and oil prices (USO) have pulled back.
Metals Focus’ senior research consultant for South Asia, Harshal Barot, noted a resurgence in demand for safe-haven assets as indicated by the recent advances of gold alongside the dollar. The dollar traded softer against the yuan for the third consecutive session. The euro fell in every session last week and extended those losses today to a little below $1.1625. The long-term immediate consequence will be felt in the dollar and an increasing investment shift to real growth and returns from Asia – meaning China.
The anti-risk US Dollar (UUP) gained cautiously against some of its ASEAN counterparts this past week. The US dollar traded at a five-day high against the yen but was unable to resurface above JPY105.00.


At present, the most recent gold futures curve is implying that investors in gold futures are losing about 1.5-2% per year. He mostly mostly writes about gold, covering topics such as central banks’ gold policy and the international monetary system, but also about financial markets in general. The Gold Analyst offers quality technical and fundamental analysis of the price of gold to help educate readers in their investment decisions. My top stock pick for November is small-cap gold exploration stock Great Thunder Gold (CNSX: GTG).
Let’s take a look at Vista Gold’s valuation: (Source: Company Presentation) As we can see above, Vista Gold’s Mt. Within the gold space, GLD is essentially the king gold ETF. Specifically, I’ve calculated a few studies which demonstrate that now is a strong time to buy gold and that GLD is likely going to rally in the coming months. Since GLD is holding physical gold, investors are benefiting from the lack of roll-yield issues associated with futures.
To understand the concept of roll yield: for argument’s sake, let’s say that gold prices were to be unchanged for several months. For example, when the stock market is falling and fear is rising, investors tend to park capital in safe assets like gold.


MARKETS TODAY OIL: Oil prices fell on worries that widening coronavirus lockdowns in Europe would weaken fuel demand and amid concerns about turbulence around this week’s U.S. presidential election. The company is bullish on natural gas prices for next year as associated gas production from oil wells will be lower in line with reduced domestic production activity. Inevitably, the new measures translate into lower oil demand and, as a consequence, lower oil prices.
In tonnage for the month, oil and gas condensate production stood at 42.19 million tonnes for October, in comparison with 40.65 million tonnes in September, the news agency reported. Looking ahead, the IEA predicts non-OPEC oil supply will only be up 0.4 million bpd in 2021 compared to 2020, although demand will be up 5.5 million bpd. The European measures are set to shave around two million barrels a day off oil demand, said Damien Courvalin, head of energy research at Goldman Sachs Group .
Oil prices fell on worries that widening coronavirus lockdowns in Europe would weaken fuel demand. While recent pressure on equity markets could be easing, oil prices slid on lingering worries that international lockdowns will sap energy demand.
Saudi seaborne crude exports for last week were seen at 44.1 million bbl (6.3 million bpd) compared to the 46.7 million bbl (6.7 million bpd) the week prior. This year TORM sold eight tankers, perfectly timing the sale of the seven when the prices hiked in the Q1 when the oil prices dropped.

United States

The Nasdaq 100 index is the first index in the United States that managed to put a new all-time high during the pandemic, fueling the stock market recovery. BEFORE THE BELL Canada’s main stock index futures were higher, tracking Wall Street futures, as investors geared up for an event-packed week starting with the U.S. presidential election. However, the outcome of the US presidential election on Tuesday 3 November is likely to set the tone for market movements this month.
Some on Wall Street believe the sell-off leading up to Election Day gives the market less downside risk to a contested result. It would, but more in terms of how steep the yield curve or how broad the equity bull market is going to be post the US election, i.e. It is a “huge week” for investors with the election, a Fed decision, 128 S&P earnings, October payrolls, ongoing pandemic lockdowns and a ton of economic data all due. Its current market cap of $9.35 billion and represents a versus Wall Street’s $1.24 billion revenue consensus for FY21 (+18% y/y; data from Yahoo Finance).
But, if the Fed provides liquidity after the market has exhausted itself to the downside, then the Fed looks like a genius and as having saved the market. In the month of October, the Fed purchased, outright, almost $100.0 billion securities, an average of roughly $25.0 billion per week. Markets riseIt is a huge week for investors with the election, a Fed decision and October payrolls all due, and they are starting it on a positive note.


This following political leaders over the summer spotlighting Beijing for its role and neglect in the spread of the COVID-19 pandemic. China reports 24 cases for Sunday, the same as a day earlier, with 21 being imported and three in the Xinjiang region (Source: Nikkei).


Trade talks between the EU and UK will continue today with media reports suggesting that the two sides are moving closer to a deal on fisheries. The company had EU$110.7 million in cash at the end of Q3 while net debt amounted to EU$117.9 million compared to net debt of EU$128 at year-end 2019. An EU diplomatic source and a UK official said negotiations would continue face-to-face in Brussels on Monday following a full weekend of talks. The market reacted positively to this announcement although in light of the previous investigation extension announced by the EU, the Fitbit announcement wasn’t unexpected.
Despite threats from both sides to walk away from a deal, Brexit Talks Continue for Another Week. As a result, MTLS’s net cash position has actually increased EU$8.2 million over the first three quarters of 2020. On the positive side, Valeo saw good demand for 48V light hybrid systems in the EU, as well as ADAS systems in the EU and China.
The next deadline in the EU meeting, November 16, in Berlin The contagion, however, overshadows what would have been favorable news from the manufacturing PMI reading. This followed the weekend announcement by British Prime Minister Boris Johnson that England will go into lockdown on Thursday, banning holiday trips. These talks started in January then quickly fell apart when the EU made demands the UK could never accept.