Open: London Session | Forex, Metals, Oil, Agriculture October 12, 2020



MARKET NEWS Chicago soybean futures edged higher, trading near a more than two-year peak hit in the previous session as the U.S. government’s estimate for lower supplies supported prices. Chicago Board of Trade soybean futures soared to their highest prices since March 2018 on Friday, after the U.S. Department of Agriculture projected tighter domestic supplies. Bioceres’ HB4 wheat is resistant to drought and tolerates the herbicide glufosinate sodium, a combination the company says can help boost yields on dry years.
Arabica coffee futures rose for the fourth consecutive session on Friday, continuing to recover from a two-month low last week as dry and hot weather in Brazil provides support. Soybean stocks were pegged at a five-year low, with rising exports eating into the stockpile, according to the U.S. Agriculture Department’s monthly World Agricultural Supply and Demand Estimates Report.


The euro edged 0.1 per cent lower to $1.1819 and the yen was broadly steady at 105.64 per dollar. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.02 per cent to 93.07. High foreign exchange reserves can be an effective tool in keeping the exchange rate stable.Dollar indexThe dollar index closed in the red last week i.e. The domestic currency had settled 8 paise higher at 73.16 a dollar on Friday after the Reserve Bank kept key interest rates unchanged while retaining an accommodative stance.
The rupee (INR), that ended flat last week at 73.13, has today opened marginally higher at 73.08 against the dollar (USD). U.S. Dollar index futures (USD measured against a basket of five major currencies) are trading up marginally to 93.097. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action.
If the foreign money continues to come in, it can help the rupee gain ground against the dollar. On a weekly basis, however, the domestic currency had lost 3 paise to the US dollar. Japanese Yen (FXY) has gained 0.10% against the dollar to 105.48.


Note: The production per gold equivalent ounce does not include the pre-commercial ounces from Barnat ), which are included in the gold production above for the Canadian Malartic mine. The gold price has reached a multi-year high at per ounce during the third quarter (Silver was about per ounce). The investment thesis has improved quite a lot since last year, and I believe the gold and silver miner is now a solid choice for a long-term investment. Production of gold equivalent was up less than 1% compared to the same quarter a year ago and sequentially.
It was an excellent production quarter at record-high gold and silver prices. Revenue estimated for the third quarter should be around (give or take $5 million,) in my opinion, based on for gold and for silver. Below is the gold production per producing mine in 3Q’20. While the gold price dropped already corrected significantly, I still think we may experience more downside despite the sharp increase on Friday.
Future prices of gold and silver are the main catalysts when it comes to investing in AUY. It is not vital to enter the details, and we know already that gold miners are not paying a large dividend and probably never will.


Further bearishness came on account of US oil rig data published by Baker Hughes showed a 4th consecutive week of increase in oil rigs. Oil producers have started returning workers to offshore oil fields in the Gulf of Mexico after Hurricane Delta made landfall over the weekend. Global crude oil benchmark Brent was trading 0.84 per cent lower at 42.46 a barrel. Norwegian oil firms struck a wage agreement with labour unions on Friday, resulting in the strike being called off.
Nearly 91% of offshore oil production facilities have been shut due to the hurricane. Prices dropped sharply in the Spring, as the oil market all but collapsed during the lockdowns.
Oil rigs went up by 4 to 193, highest since early June. Access the gasoline report here (link to be pasted on Eikon search) You can access the full report here. Lenders in the oil-rich Gulf have been combining as regional economies suffer the twin shocks of lower energy revenues and the pandemic. Brent and WTI were lower by 1.0% at $42.42/bbl and $40.2/bbl respectively as of 0515 hrs GMT.

United States

less U.S indexes saw significant volatility last week that ended in gains, thanks to talks around stimulus. One or two papers suggest this might be happening, although neither indicates that shy Trump voters could make up more than about two percentage points of the difference. On U.S. stimulus, President Donald Trump and House Speaker Nancy Pelosi blamed each other for a lack of progress on a new plan to support the economy. less According to, Textron Systems, via its subsidiary Howe & Howe, is set to deliver two versions of a new robotic tank to the US Army.
“We’ve spent $2.5 trillion over the term in office, my term,” Trump recently said. The latest Dallas Fed report shows the industry is still in a sharp contraction, which is causing the XLE to decline. He has been quoted in a variety of financial news publications, such as CNBC, the Wall Street Journal, and the New York Post. Several websites, including the Wall Street Journal, have the earnings report coming out on October 15.
Dow Jones advanced 1.56%, S&P 500 gained 2.01% and Nasdaq 100 climbed 2.18% during the week. His views have been quoted in Barron’s, the Wall Street Journal, on CNN and now on his own web site.


The ECB has warned that another round of lockdowns could add more than $1 trillion in bad loans to the pile, raising the possibility of banking sector bailouts. Caught Up Boris Johnson’s Oct. 15 deadline for the outline of a Brexit deal is just days away following an intense weekend of diplomacy. Some doubters at the ECB say that climate activism is the work of governments, not central banks. German Chancellor Angela Merkel is seen by the rest of the bloc as a deal-maker who could convince other governments to compromise.
The U.K. prime minister told French President Emmanuel Macron on Saturday that Britain remains committed to seeking a pact with the European Union, but not at any cost. The Brexit clock is ticking, there’s more pandemic restrictions on the way and there’s a big banking merger in the Middle East. We also publish the Brexit Bulletin, a daily briefing on the latest on the U.K. s departure from the EU. less Brussels Edition Follow Us Get the newsletter Welcome to the Brussels Edition, Bloomberg s daily briefing on what matters most in the heart of the European Union.
EU leaders are going to discuss the flare-up in infections at this Thursday s summit. Elsewhere, European Central Bank President Christine Lagarde will attend the virtual annual meetings of the International Monetary Fund and the World Bank.