Close: London Session | Forex, Metals, Oil, Agriculture October 14, 2020



Ideas are that most of the Cotton crops in the region have open bolls now and that some significant damage might have been done due to wind and rain. The reason for this is because offices and stores such as dentists, salons, and coffee shops have most probably removed their magazines. General Comments: Cotton closed higher on follow through speculative buying. Coffee may revisit its September high while cocoa its July low.


The dollar index edged up and gold gained on demand for the safe-haven assets as investors contemplated a murky outlook in the near term. A combination of Chinese demand and a weak U.S. dollar has supported metal prices more generally this summer. The dollar, in the meantime, trades with a soft bias and also collaborates with the upside momentum in gold. This was primarily due to a 10% drop in payment dollar volume and a 13% decrease in processed transactions to approximately 30.7 billion.
Stimulus typically means that we have buyers stepping into the marketplace to take advantage of a depreciating US dollar. We think cross border volume and dollar payment volume stabilizes. The dollar index edged down. By contrast, the same dollar invested in XLE over that span would be worth about 60 cents. Sterling pared earlier losses on reports that the UK would not walk away from the talks just yet, while the euro remains on its back foot. These may include high-yield, non-U.S. dollar-denominated debt, (floating rate) bank loans and derivatives.


This led to a fascination for monetary gold and for researching, analysing and writing about the gold market. Topics discussed in the interview include: Video Length: 00:42:19 Ronan Manly is an investment professional and research analyst with an interest in the monetary gold market. In his writing and research, Sumner specializes in monetary policy, the role of the international gold market in the Great Depression, and the history of macroeconomic thought.
Gold was the component with the largest gain, so it was sold off and moved mostly to the money market, with a little going to long-term treasuries as well. Gold may drop more, driven by a wave four Base metals may keep their bullish momentum awhile, but with limited upside. Once these price targets are triggered, I expect gold to go to at least $2,400 in 2021, and I wouldn’t be surprised to see silver above $35 next year. State Street’s success may be partially attributed to its gold ETF, which attracted record demand from investors for physically-backed bullion ETFs this year.
However, I do see value in owning precious metals, especially gold and silver. On the technical analysis (TA) side, gold and silver recently peaked and are set up for the next up leg. The other is a short- to intermediate-term technical indicator that points to nice gains for gold and silver over the next year.


Given a higher correlation between midstream performance and oil prices than production trends, an oil price recovery would likely be more constructive for midstream equities than volume growth. Setting aside the demand shock of COVID-19, in recent years, US oil production growth has more or less kept a lid on global oil prices. From a supply standpoint, greater discipline by producers may help US oil production avoid oversupplying the market to the detriment of oil prices.
In the near term, US oil production declines could help to restore the balance in global oil markets, which was derailed by the demand destruction resulting from COVID-19. I have worked in the areas of oil refining, natural gas production, synthetic fuels, ethanol production, butanol production, and various biomass to energy projects. ENB’s Mainline was regularly filled to the maximum and oil companies had often resorted to crude by rail in order to get oil transported. The major oil plays in Canada consisting of Suncor (SU), Canadian Natural Resources (CNQ), Imperial Oil (NYSEMKT:IMO) and Cenovus (CVE) have assets with higher operating cost break-evens.
Kazakhstan pledged to cut oil output by 390,000 barrels per day in May and June to 1.319 million barrels per day under the OPEC+ deal agreed in April. Clearly, much depends on improving demand and progress with a COVID-19 vaccine, but perhaps, in this recovery, US oil production will not overshoot to the detriment of prices.
As discussed in detail in last Tuesday’s piece, the Energy Information Administration (EIA) is forecasting that US oil and natural gas production will decline in 2021 on average.

United States

Asian stock markets ended on a mixed note, as global markets await further clues of the US fiscal stimulus deadlock and coronavirus vaccine trial halts. BEFORE THE BELL Wall Street futures were little changed on doubts about more fiscal stimulus, and ahead of the next batch of quarterly earnings. Wall Street futures were little changed on doubts about more fiscal stimulus, and ahead of the next batch of quarterly earnings. Earnings The big surprise from the start of Wall Street earnings season yesterday was the much smaller than expected level of loan-loss provisions.
Most astounding perhaps the level of complacency building in markets into the US election and into year end. US stock futures are trading higher today, indicating a positive opening for Wall Street indices. Indeed, the better mood around the precious metal comes after President Trump’s stimulus proposal of $1.8 trillion came in short of expectations according to House Speaker N.Pelosi.
The US itself has a packed corporate calendar this week, and yesterday saw earnings reports from banking giants JPMorgan and Citigroup, plus Apple’s launch event for the new iPhone. Nasdaq Futures are trading up by 27 points (up 0.2%), while Dow Futures are trading up by 86 points (up 0.3%). Sentiment deteriorated on the news that coronavirus hospitalizations in the US hit their highest level in six weeks and as optimism of an economic stimulus package continued to evaporate.


Several months ago, Beijing weighed in against thermal coal, but now the “soft” ban includes coking coal, according to reports.


A person close to the negotiations said that Johnson will not make a decision on his next move until after an EU leaders summit ends on Friday. The decision follows a similar WTO ruling from last year that allowed the U.S. to impose tariffs on $7.5B in EU goods over state support for Airbus (OTCPK:EADSY). Johnson will make a decision on whether to end talks after EU leaders meet tomorrow and Friday, an official says. Forex market traders remained circumspect ahead of US presidential election and Brexit deadline,” Devarsh Vakil, Deputy Head Retail Research, HDFC Securities, said.
According to media reports, the EU is preparing to blacklist at least six people and one entity over Russia’s “attempted murder” of Navalny. Undoing deals | Boris Johnson s government is drawing up plans for a radical new law that would give ministers power to unravel foreign investments in British companies. Both the U.K. and EU don’t appear to be making any headway as the clock ticks down to Boris Johnson’s deadline for abandoning negotiations over their future trade relationship.
We have been observing the EU import trends for quite some time and filing the dumping complaint is a big step for us, Wendt said by phone. The European Union is poised to blacklist six people and one entity in Russia over the attempted murder of opposition leader Alexey Navalny. The World Trade Organization has awarded the EU the right to impose tariffs on about $4B in American goods in retaliation for subsidies granted to Boeing (NYSE:BA).