Close: London Session | Forex, Metals, Oil, Agriculture September 16, 2020

Agriculture

Below, you can see the company’s revenues, against the price indices of corn and soybeans, which go hand in hand, and are immediately related. With the exception of minor production corn issues in Q2, the company’s processed volumes remain primarily solid on a quarterly basis. Sugar prices at the Vashi wholesale market ruled mixed on Wednesday. The Bombay Sugar Merchants Association spot rates (₹/quintal): S-grade 3,282 – 3,352 and M-grade 3,386 – 3,502 .

Currencies

The general weakness of the US dollar in Forex markets can be clearly seen in the exchange rate of the US dollar with the Chinese yuan. From over 6.9400 yuan for a dollar one month ago, the dollar is now at 6.8344. The RMB moved from 6.951 to 6.770 per dollar – equating to a stronger RMB, or a weaker dollar. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action.
At the same time, since the dollar is the pricing mechanism for most commodities, weakness in the US currency since March has been supportive of prices. This shows that the dollar strengthened against the yuan after 2016 and reached a level of over seven yuan. The Fed’s soft monetary policy stance will keep the dollar under pressure until it morphs into a safe haven in the event of a stock market crash. The Chinese RMB has strengthened against the dollar in the region of 2.5% in the last four weeks, as the below graph from XE currency exchange firm shows.
US dollar weakness has become evident in the exchange rate with the Chinese yuan. The PBoC let the yuan weaken against the dollar and then accommodated the Americans by strengthening the yuan.

Metals

According to the Silver Institute’s Annual World Silver Survey, silver investment demand was up 12% in 2019 over the previous year. Even once silver prices soar, mines that produce silver cannot just ramp up silver production. If we look at how silver compares to gold in bull runs, it turns out silver has outperformed five of the last six times. Aside from copper, FCX also produces gold, molybdenum, silver, and other metals, as well as oil and gas. 71% of newly mined silver is only produced as a by-product of other metals like gold, copper, lead and zinc.
When it comes to the price of gold, there is always much discussion in the gold space regarding the COMEX futures exchange. While the rising price of copper has miners looking to increase output, the decline in copper inventories confirms lower production and increased Chinese demand. The Gold Analyst offers quality technical and fundamental analysis of the price of gold to help educate readers in their investment decisions.
The total number of open long and short positions in the COMEX copper futures market has been rising with the price since April. When silver really gets going, it can surprise even the most ardent of silver bulls.

Oil

Oil prices jumped as a hurricane closed U.S. offshore production and an industry report showed U.S. crude inventories unexpectedly decreased. Oil prices jumped over 2% after data showed that U.S. crude inventories unexpectedly declined. The shale revolution has created tremendous natural gas supply, making the export of liquefied natural gas a viable new industry (as domestic gas prices plummeted). The hurricane has shut more than a quarter of U.S. offshore Gulf of Mexico oil and gas production and stirred heavy seas that closed ports from Louisiana to Florida.
In 2018, oil production broke 10 million barrels per day for the first time since 1970. Reuters notes a quarter of all U.S. Gulf of Mexico offshore oil and gas production has been taken offline, with some refiners inland shuttering operations. Our economic problems this far into 2020 are not crude oil alone, however, as that interpretation of demand indicates. Brent crude oil, the global benchmark, rose 2.3% to $41.45 a barrel and West Texas Intermediate futures, the U.S. benchmark, were up 2.5% at $39.24 a barrel.
We also write daily and weekly reports, covering key variables in U.S. natural gas market (supply, demand, storage, prices and more).
But that’s a more macro concern for now, with higher prices (including food) obscured by lower (OIL) and other prices, even currently.

United States

The market caps of payment stocks like Visa and MasterCard have eclipsed the value of Wall Street’s biggest banks, even as their balance sheets remain significantly smaller in comparison. These conditions also are not likely to go away as the Fed has reiterated their intention to maintain the current 0%-0.25% target rate, even if inflation exceeds 2%. Get ready for another Fed-filled session following the recent symposium in Jackson Hole and the first meeting since Chairman Jerome Powell announced a greater tolerance for inflation.
The Fed also has a huge impact on the asset side, announcing in March that it would buy “unlimited” amounts necessary to stabilize the market. Benchmark indices edged higher, ahead of the outcome of a two-day policy meeting of the US central bank. The company reports that there is a huge untapped market with 2.5 million in the US suffering from stage-4 COPD. Inflation trends, of course, require time to unfold, and so, the Fed’s dovish policy may eventually be successful.
Indeed most gains in markets come around days that have Fed Day written on them, a well established history going back decades now. less Since the US stock market hit bottom on March 23, the subsequent rally has been swift but uneven. August retail sales data will be released at 8:30 a.m., while investors will eye the Fed’s latest policy meeting this afternoon.

China

Yet, the dilemma does not seem unmanageable, and Beijing might want to be inclined to make some concessions and give Biden a chance to reset the relationship. The PBoC will tend to favour a weaker yuan to protect export industries as it opens up with its new digital currency. As it looks right now, the high-profile deal will set up Oracle as the “trusted tech partner” of TikTok and not as an outright sale, which Beijing has opposed. The private equity powerhouse has raised over $11 billion after the first-close of its fourth Asia-focused fund, its Beijing-based managing director Chris Sun said.
Hawley is advocating for a “clean break” between ByteDance and TikTok, something Beijing would, in all likelihood, never allow.

Europe

Source: FXStreet Economic Calendar Instead of advancing toward a post-transition period trade deal, Prime Minister Boris Johnson is moving to violate the divorce bill signed last year. In a speech today in Brussels, she said the 27-nation European Union will sell $267 billion of green bonds as part of its pandemic recovery fund. Prime Minister Boris Johnson has been seeking to soothe concerns about the controversial Internal Markets bill that passed the first hurdle in parliament.
The legislation violates the Brexit deal that Johnson signed with the EU – as admitted by government ministers. Lagarde Leverages Virus to Press for Greener Monetary Policy The pandemic recession is leading Europe s central bankers to join the fight against climate change. Germany’s ZEW investor sentiment index rose in September despite roadblocks from Brexit and rising coronavirus cases. It’s not quite The Sun screaming “EU Marmite Pirates!”, but it still has one pulling one’s (Black or Blue) beard.
In the U.K., a test and trace system described as world-beating by Prime Minister Boris Johnson is short of testing kits.
I share the European Union position on China, Vincenzo Amendola, Italy s minister for European affairs, said in an interview. As such, the ECB may have viewed it as an unfair playing field.

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