Open: London Session | Forex, Metals, Oil, Agriculture October 21, 2020



That is consistent with rising international prices, particularly in top supplier Russia, where wheat prices hit record levels last week amid the weak currency and high export costs. MARKET NEWS Chicago corn futures rose for a third consecutive session and hit their highest in 14 months, as strong demand and Brazilian dry weather underpinned the market. It said farmers had completed wheat and barley harvest and collected 11.1 million tonnes of corn from 2.4 million hectares, or 44% of the sown area.
Most-active CBOT wheat hit $6.38-1/4 per bushel on Tuesday, the contract s highest since Dec. 24, 2014.


A stronger euro makes euro area exports pricier in international terms, thus reducing the probability of higher inflation. It is also possible that the 2020 PPP fair value figure will be modestly higher than 1.69, provided Canadian inflation continues to exceed euro area inflation. The euro is not viewed as a safe haven, and in contrast to Canada, the euro area is in fact a net-importer of crude oil products. In a global economic rebound, Canadian inflation is much more likely to surge than euro area inflation (judging by history).
The point here is two-fold: China is setting the scene to challenge a fiat dollar, at a sensitive moment of dollar weakness. Looking forward, it seems Europe and Japan may raise rates before the U.S., which could push the dollar into a prolonged bear market. With the U.S. dollar in a precarious position, it is logical that investors for investors to increase exposure to international equities. Figure 3 shows that periods of strong momentum in the US dollar as we have seen since March also coincide with strong trends in precious metals.
EU bonds could become the “U.S. Treasuries of Europe,” and long-term confidence in the market for EU debt could even kill the long-term bearish trend in the euro. The higher volatility regime will limit the upside gains in precious metals, and therefore, increase demand for traditional safes such as the US dollar and the Japanese yen.


If you are unfamiliar with Yamana Gold, this is a mid-tier gold miner that is estimated to produce 1 million gold equivalent ounces from its mines in 2020. I’ve used these company estimates, along with production figures and average realized gold & silver price estimates, to come up with my projected figures for its Q3 2020 earnings. Last quarter, the company reported $63.3 million in earnings with gold prices averaging $1,713/oz and silver averaging $16.83/oz, and with its AISC coming in high at $1,125/oz.
The unbacked gold receipts do not have any backup of proper money, which is gold. I think Yamana will easily exceed $.08 per share, given its strong Q3 production and higher average realized gold price, and the expectation for lower all-in sustaining costs. Well, this quarter will definitely see these prices over $1,900/oz for gold and $23/oz for silver, with Yamana’s AISC likely falling to $1,050-1,075. The tie-in to silver here is that when investors are fearful, they seek yield in alternative assets, thus propping up the price of silver.
As a reminder, both gold and silver have no fundamental value (i.e., no dividends or coupons), but they do have a storage cost. Figure 4 shows a striking relationship between the annual change in gold prices and the annual change in the G4 central banks’ assets in the past cycle. Also, note that honest money is obtained by selling some useful goods for it: the potato farmer has obtained one ounce of gold by selling ten potatoes for it.


Oil prices are important for CAD, since the energy industry has historically contributed around 10% to Canadian GDP; Canada remains one of the world’s key net-exporters of crude oil. However, while crude oil prices are still about a third lower on the year, a rebound from the lows has helped to close much of this gap. Any economic rebound is also likely to support oil prices, which will place a drag on further EUR/CAD strength. Accenture estimate that analytics alone could generate as much as $425 billion in added-value, by 2025, for the oil and gas industry.
The first ascent was enabled by collapsing risk sentiment, which hit both equities and oil prices (through March 2020).

United States

While the US market is trading the reflation narrative, the EUR market has been driven by Covid, lockdown fears and slowing economy. More likely is that Trump is concerned Ant threatens the global banking advantage the U.S. has long taken for granted. The US central bank’s (Fed) extreme USD liquidity injection should reduce the USD shortage at the turn of this year. Now, the US Forest Service has ordered that , emphasizing suppressing fires by the morning after they begin in what is known as the ’10 a.m.
The Second Cold War between the US and China has significant consequences across East Asia, especially on the Korean Peninsula. The Nasdaq composite snapped a five-day losing streak, rising 0.3% to 11,516.49. It’s collaborating with nine start-ups around the region, including GCash in the Philippines and Paytm in India. He underscored in an indirect shot at the Trump administration: Seeking AlphaREITsOct. Team Trump is not alone.


China Central Television (CCTV) building in the Beijing Central Business District China has long been strategically positioning itself to fight this ‘war’ of tech standards (i.e.


Demand for these bonds is strong, and it is possible that EU debt could provide EUR with a source of long-term demand, support and confidence. The countries have two months to provide satisfactory answers.Tech Cop | The EU has long been the world s most aggressive regulator of the world s biggest technology firms. In our view, the current pricing looks a bit overdone, as we think the ECB prefers other measures to a deposit rate cut. ECB €STR swaps imply a probability of one third for a 10bp deposit rate cut in December.
Cloud platforms; and is looking at setting EU protocols for algorithms (to reflect EU social objectives and ‘liberal values’). The headline is: EU enjoys ‘outrageous demand’ for first Covid-related bond. Brexit Impasse | A half-hour call between Britain s and the EU s chief Brexit negotiators failed to unblock a stalemate over trade negotiations. * Key resistances broken in UST yields, June highs next * ECB pricing overdone? the market is not speculating whether the ECB would cut or not.
As a result, the ECB short end has been discounting further rate cuts.