Close: London Session | Forex, Metals, Oil, Agriculture September 08, 2020

The U.S. is targeting cotton in its latest move and may ban products that use supply from the top growing region of Xinjiang. Cotton products made in the Xingjiang region could be subject to a ban in the latest threat. Cotton products made in the Xinjiang region could be subject to a ban in the latest threat. The coffee chain said it was introducing products in markets such as Hong Kong, Singapore, New Zealand, Taiwan and Thailand that suit local tastes and preferences.
Over two decades ago Jay got his start at the Kansas City Board of Trade in the Wheat Futures pit. Sugar prices ruled steady on Tuesday as volume remained need-based on easy demand-supply. They will buy it like instant coffee and ketchup.

If real rates remain low – if real growth expectations remain muted – then gold strength and dollar weakness are likely to go hand in hand. The dollar’s trend continues, with both the Scandis lower for the sixth consecutive session and the euro and sterling off for the fifth day. Many agricultural commodity prices have appreciated over the past weeks as the dollar has been falling since the height of risk-off conditions in markets less than six months ago.
The dollar index broke through its technical support level at the September 2018 low of 93.395 and was trading at the 93 level at the end of last week. It Will Be A Massive Week With The ECB On Deck GOLD (GLD) Gold may finally snap today, as the “inflation/speculation” bubble pops if the dollar starts to strengthen. The sudden strength in the dollar is weighing on oil today, and it looks like oil will have a hard time standing until we get a look at inventories. The bullish trend in the dollar that had been in place since February 2018 ended and the downside target now stands at the low from that month at 88.15.
Central bank liquidity, government stimulus, and a falling dollar are a potent bullish cocktail for the commodities asset class. A falling dollar tends to be a bullish factor for silver and gold prices. Gold prices are correlated with the dollar but the better correlation is with real interest rates.

If silver is heading higher, silver mining companies are positioned to take advantage and tend to offer even higher percentage gains than in the silver futures market on COMEX. Gold moved to a new record high of over $2000 per ounce, and the price of silver more than doubled since March. Gold rose to a new all-time high, and silver soared from $11.74 to almost $30 per ounce. The downside spike ignited the buying that took the silver futures market to just shy of $30 per ounce on the continuous futures contract.
The price carnage in the silver market set the stage for an explosive rally that took the price to its highest level since 2013. However, silver mining companies involved in primary production stand to profit if silver is heading for record levels. After a rally that took the price to a high of $18.92 in February, the bottom fell out of the silver futures market. The Global X Silver Miners ETF product (SIL) holds shares of many of the leading silver mining companies.
While this is a massive improvement from the initial offer of US$30.57/oz for Cardinal, it’s well below the price paid we’ve seen recently, despite a record gold price. On Friday, September 4, nearby silver futures settled at $26.712 per ounce, $3.203 below the high for 2020, but $14.972 above the low.

(Oil prices are all $USD WTI) (Source: Google) The largest concern for any oil company/investor right now is the price of oil. The largest risk to any oil investment remains the price of oil itself. After trading in negative territory in late April, the price of nearby NYMEX crude oil futures moved back to the $40 per barrel level. Futures tied to West Texas Intermediate, the benchmark grade of U.S. crude oil, fell 3.4% to $38.43 a barrel in New York, their lowest price since late June.
Abu Dhabi National Oil Co. also cut prices on Tuesday, the latest response to a sluggish demand backdrop in the world’s biggest oil-consuming region.
We feel that this gives Pioneer an inherent advantage, given that the oil demand outlook is unclear, and prices are hovering around the $40/bbl level. This deal will boost production volume by ~37% and help shift the company more towards natural gas, and away from oil. These companies are most exposed to negative headwinds, including from oversupply in oil, natural gas and liquefied natural gas. Even as the price of oil hangs in the low $40s, Crescent Point is increasing their production by ~20% for the end of the year.
Further, with a strong balance sheet and production enhancement prospects, Pioneer could actually prove to be a lucrative way to play an increase in oil prices.

Last week, the tech-heavy Nasdaq Composite fell 3.3% in its worst week since March 20, driven by pullbacks in market-leading stocks such as Amazon, Apple, Microsoft and Facebook. At that time, the company was approved to list its common shares on the Nasdaq Capital Market which previously had been trading at the Norwegian OTC. The US Fed recently told markets the central bank is willing to tolerate inflation levels higher than its 2% target rate. Futures tracking the Nasdaq 100 index fell after a report said SoftBank made significant option purchases during a Wall Street rally since a coronavirus-driven crash in March.
less The US trading week begins with a fresh dose of red ink hanging over the major asset classes from last week’s sell-off. Nasdaq futures are off more than 2%, as investors remain nervous about the drop in big tech shares last week. Finally, the US Federal Reserve told the world that it is prepared to tolerate inflation above the 2% target rate to stimulate the economy.
Tech-heavy Nasdaq Composite Index futures fell 1.3% after a bout of volatility last week led to big drops in the index. U.S. petroleum stocks continue to plummet, and concern that President Trump wants to decouple from China is hurting the stock market. Though Trump personally contributed $66 million to his 2016 campaign, it would be unprecedented for an incumbent president to put his own money toward winning a second term.

An Al Jazeera correspondent in Beijing reports that “According to the Chinese side, Chinese troops approached the India side for negotiations, and then they say.” As much as they dislike it, other countries may yet need Beijing to help keep them afloat. Beijing charged India with a after it claimed Indian troops breached the LAC and entered the Chinese to side. Speaking during a ceremony in Beijing, President Xi insisted that China had been “open and transparent” about the coronavirus.
Countries are talking more about the need for economic decoupling from Beijing.

Brexit brinkmanship | I will not back down, Prime Minister Boris Johnson vowed in a new threat to walk away from Brexit talks without a trade deal. This deal was deemed to be crucial for the EU to ensure a trade deal between both countries. Not convinced | Boris Johnson s threat to cut U.K. ties with the EU without a trade deal is leaving most economists and traders unruffled for now. The Merkel-Macron plan would offer 500 billion euros, or roughly 569 billion dollars, in grants as an economic lifeline to pandemic-stricken members of the union.
The EU appointed Latvia’s Valdis Dombrovskis as its new trade chief in a leadership revamp triggered by last month’s resignation of Irish commissioner Phil Hogan.
Financing the fund with joint EU bonds marks a big step towards mutualizing member states’ debt. With only around 54 billion euros in outstanding debt, the EU has yet to leap big time into the bond fray, but that is about to change. European shares slipped on fears that the UK was in danger of leaving the European Union without a trade agreement. Boris Johnson said that the trade agreement with the EU should be concluded before October 15, otherwise it will never be met.
A big sticking point is repaying the debt issued to create this fund would place a heavy burden on the EU budget from 2028 onward.