Open: London Session | Forex, Metals, Oil, Agriculture July 26, 2020



Industrial commodity and gold stocks look good too.


Looking forward, however, the cartel of major oil producers have optimistic projections for world oil demand to recover during the second half of 2020 and into 2021. This has primarily contributed to a supply-demand imbalance of 9.8-million barrels per day penciled in by Opec for 2Q-2020. less Crude oil price action has staged a monumental recovery since the commodity traded in negative territory this past April. The price of Brent has nudged higher over the week with little in the way of any macro-news to either accelerate the trend or cause it to change direction. Brent has tried and failed twice to breach this level this week and a third attempt looks likely very soon. Both the IEA and EIA anticipate global oil demand to increase in the months ahead as well according to their respective monthly oil reports. Brent is finding support from the upward sloping 20-day moving average, an indicator that is has respected since early May.

United States

Blue Tower Asset Management letter to investors for the second quarter ended June 2020, discussing amond other things their holdings in (microcap) EZCorp Inc (NASDAQ:EZPW). As expectations of global economic growth for the next ten years have fallen, real interest rates in the US have plummeted to negative levels. Clearly the Fed will maintain its current policy but will face questions about what more can they do to support/boost the economy. Each week, well over a million readers turn to John Mauldin to better understand Wall Street, global markets, and the drivers of the world economy. If Trump happens to win, which looks less likely by the week, we would expect continued pro-growth policies too. We remain favorably inclined to own risk assets as both the Fed and government are both all in providing all the liquidity needed to carry us to the future. The bottom line is that the Fed and government will have our backs next year and probably in 2022 too which is favorable for owning risk assets.