Open: London Session | Forex, Metals, Oil, Agriculture July 31, 2020

Agriculture

Dry conditions started hitting wheat crops in early June, prompting the exchange to cut its 2020/21 wheat planting estimate to 6.5 million hectares from an original 6.8 million. The U.S. Agriculture Department said on Thursday that private exporters sold 1.937 million tonnes of corn to China for delivery in the 2020/21 marketing year.

Currencies

Dollar index:The dollar index continues to make fresh lows. “The US dollar extended losses this morning in Asian trade weighed down by weak economic data and President Trump’s tweet on elections,” Reliance Securities said in a research note. At the interbank forex market, the rupee opened at 74.74, gained further ground and touched 74.69 against the US dollar, up 15 paise over its last close of 74.84. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.40 per cent to 92.65.
The Indian rupee surged 15 paise to 74.69 against the American dollar in early deals on Friday tracking weakness in the greenback. It’s time to find out by how much the euro area economy contracted in the second quarter, with gross domestic product numbers due this morning. Every dollar you contribute empowers us to be a more efficient and effective watchdog organization. Meanwhile, the dollar continued its slide against major peers.

Metals

New Gold will sell the project to Artemis Gold (OTCPK:ARGTF) for $142 million in cash and $15 million in Artemis Gold’s shares. As 201,514 toz of gold equivalent was produced in H1 2020, 213,486-253,486 toz of gold equivalent should be produced in H2 2020 to meet the revised guidance. The Detour Lake mine produced 131,992 toz gold, and the Macassa mine produced 41,865 toz gold. As only 660,634 toz gold were produced over H1, at least 689,366 toz gold should be produced in H2, in order to meet the guidance.
(Source: Author’s own processing, using data of Kirkland Lake Gold) Kirkland Lake Gold was long known as one of the lowest-cost gold producers. The best holes include 1.41 g/t gold over 121 meters (including 16.33 g/t gold over 3.5 meters), or 1.23 g/t gold over 138 meters. According to the updated production guidance, Kirkland Lake Gold should produce 1.35-1.4 million toz gold in 2020. (Source: Author’s own processing, using data of Seeking Alpha and New Gold) New Gold’s cash position improved notably during Q2, to $700.2 million.
In Q2 2020, New Gold produced 98,079 toz of gold equivalent. (Source: Author’s own processing, using data of Seeking Alpha and New Gold) Back in April, New Gold withdrew its 2020 production and cost guidance.

Oil

Indonesia, which has been increasing the palm oil content of its biodiesel since 2015, wants to cut its energy imports and increase consumption of palm oil. On Thursday, Brent closed down 1.9% but had recovered much of the ground lost from the lowest level since July 10.U.S.

United States

Trump’s tweet on the subject came minutes after data showed the world’s largest economy shrank at a record pace in the second quarter. The US 10-year yield notched its second lowest level on the daily close yesterday near 54 basis points– only exceeded by a single day during the panic of March. The US economy plunged by a record-shattering 32.9 per cent annual rate last quarter. As well, we note the strength in the long end of the US bond market we discuss below – as lower yields have historically been JPY-supportive.
Former US president Barack Obama has reportedly criticised Donald Trump for his “nativist, racist, sexist” rhetoric in fundraising calls for Joe Biden‘s presidential campaign. But it remains that over the past decades there hasn’t been any observable major nuclear ‘accidents’ on the scale that this new Trump admin memo envisions as possible. Opinion Trump’s election delay proposal is meant to protect his vanity in case he loses; he can call the result illegitimate as he goes, Bloomberg Opinion’s editors write.
During Wednesday’s press conference announcing the controversial Trump-ordered Pentagon plan to withdraw 12,000 troops from Germany, Mark Esper said the lies in part with its mission to . Fear of a false or accidental fire stem from the US nuclear systems being originally designed to launch minutes after a perceived enemy nuclear attack. It’s also important to recognize that even before the coronavirus crisis there was a long-running disinflationary bias coursing through the US economy.

China

Businessweek reports Xi Jinping’s next target may be Taiwan, which has said China may seek “excuses to start a war” to bring the island under Beijing’s control. In China, Xi Jinping called for a greater push on reforms to stimulate domestic demand, as the economy continues its steady recovery. For decades, Communist Party leaders have sought to bolster their legitimacy by bringing more territory under Beijing’s control. Alyssa McDonald Taming Taiwan With Hong Kong’s national security law in place, fears are growing that China’s President Xi Jinping will now turn his attention to conquering Taiwan.

Europe

Scotland has meanwhile said it will fight U.K. proposals for an internal market to replace outgoing EU legislation next year, calling it a “blatant power grab” by Westminster. Source: Wizz Air Just this week, the European Union updated its border list, which shows that only foreigners from 12 non-Schengen countries could enter the countries of a union.

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