Open: London Session | Forex, Metals, Oil, Agriculture December 30, 2020



Dollar indexThe dollar index, which closed with a loss in last session, seems to have carried over the negative sentiment in today’s session as well. Its New Zealand counterpart added 0.5% to 71.35 US cents.The Chinese yuan gained 0.2% to 6.5192 per dollar in the offshore market. The net FPI inflows yesterday stood at ₹2,350 crore (equity and debt combined).This trend is likely to continue and this can aid the rupee gain ground against the dollar. Breaking out of the range, the rupee (INR) closed at 73.32 on Tuesday, above the resistance of 73.50 against the dollar (USD).
The Australian dollar gained0.3% to 76.035 US cents.


So Hindsight shrewdly bet against crude and went long iron ore.


Since crude oil and oil products dominate the energy sector, many of the top holdings are oil companies. When the oil price falls, as it did catastrophically, those most hurt are oil-exploration companies demand for their services collapses. The ETF and all oil-related shares reached lows in March 2020 as NYMEX crude oil was on its way to a negative price on April 20. Since then, crude oil and energy-related shares have made higher lows. As with all oil companies, 2020 has been a challenging year.
XLE is a bellwether ETF for US oil-related companies. Meanwhile, OPEC+ was fracturing, with tensions between Iran, Saudi Arabia and Russia growing unmanageable.

United States

Importantly, the Fed supported corporate debt, which reduced default risks and restored normal market functions following the deterioration in financial conditions resulting from the lockdowns. We expect the Fed to remain supportive for some time, with current Federal Open Market Committee (FOMC) projections showing rates remaining at this level through at least 2023. The Fed also cut benchmark interest rates to near zero, reducing borrowing costs for business.
Many Wall Street companies currently rate COP as a buy or overweight for portfolios. Fed data from 2016 show that only about 14% of families are directly invested in the markets. The CARES Act kept consumers afloat and the Fed backstopped risk assets with whatever-it-takes support. For markets, the old adage rang true: Don’t bet against the Fed. Research from our team of in-house analysts has been quoted by The Wall Street Journal, Bloomberg, MarketWatch, USA Today, Kitco, Reuters, US News & World Report, CNBC, and more.