Open: London Session | Forex, Metals, Oil, Agriculture October 23, 2020



Corn, soybean and sugar prices have been sizzling of late, yet coffee has been in the doldrums. MARKET NEWS U.S. wheat futures gained as traders worried expected rains across key producing regions would be insufficient to ease the threat of reduced output. On the demand side, the latest S&D Coffee and Tea Market Report observed signs of increased consumption, as U.S. commercial stocks have recently declined. The following graph illustrates just how much coffee (green line) has lagged the other major “softs” this fall, putting into context traders’ growing frustrations.
France is the main wheat supplier to Algeria, and it is the top export market for French wheat. We’re not there yet, though, so no new long positions are currently recommended in coffee futures or coffee-tracking ETFs. Indeed, La Niña is threatening even more bad weather in the coming months, which is hardly conducive for productive coffee flower development. The good news is that coffee appears to be approaching a critical juncture and is likely very close to confirming a tradable bottom.
Those bookings have translated to a record shipment pace for soybeans, but corn has yet to turn out the drastically larger export volumes. Why has coffee been in the dumps while other agricultural commodities are in full-blown rally mode?


“We continue to see a high risk that the election outcome is delayed or contested,” she said, adding to near-term downside risks for the Australian dollar. A continuation of this trend can positively impact the domestic currency.Dollar indexThe dollar index closed with a marginal gain yesterday following a sharp fall in the preceding trading sessions. “There may be verbal fireworks but we expect no material impact on the dollar,” said Commonwealth Bank of Australia currency analyst Kim Mundy.
After all, Microsoft started its journey to becoming a trillion dollar company with Windows 95 after ripping off Apple, who ripped off their operating system from Xerox. Nothing about trading in the dollar or S&P futures suggested anyone in the markets thought anything out of the ordinary had happened.


Bitcoin can be regarded as a gold on steroids trade, for those who believe that the global order is about to break down, taking fiat currencies with it. It suggests that the recent rally may be providing a signal to buy gold, which has been off the boil for a couple of months. Yet bitcoin is far outpacing gold. A massive gold field.


Brent oil may test a support at $42.24 per barrel, a break below which could cause a fall to $41.59.The contract is still consolidating within a wedge. Crude oil futures still trade around a third lower than levels at the start of the year. Provided oil prices hold up in a fairly stable fashion, CAD is probably unlikely to concede much more strength against alternative commodity currencies such as AUD and NZD. Many of my Panick High Yield Report members are fully loaded on high yield plays in the midstream oil and natural gas sector.
FDX has proven it can go through oil price crises, recessions, and even cyber-pirate attacks, and still reward its shareholders. Also, Bidens very aggressive rhetoric towards the oil industry during the debate on Climate Change was interesting. Another hedge applied was shorting oil futures. Canada is a net-exporter of crude oil, whereas Australia is a net-importer. $WTI remains well below pre-COVID levels.Historical studies reveal that US loan activity rises when the spread between T-Bills/10yr Treasury is above 0.20%.Advice to investors remains the same.
$WTI hedges drove prices briefly below (negative) – $30+/BBL.

United States

A vaccine could be another way for Trump to regain momentum in the presidential race, since he is still far behind in nationwide polling. The fact LAS has entered more significantly into the US market shows management isn’t afraid of competing, but this confidence could penalize them if it proves to be arrogance. At some point investors may recognize the US has a much faster recovery from COVID than any other country and focus solely on US markets.
The big dark horse ahead of the debate was whether Trump had a “smoking gun” from Hunter Bidens laptop that Rudy Giuliani allegedly holds a copy of.
Finally, The stock posted strong guidance recently and the market got all hyped about both UPS and FDX. The FCEL common stock trades very actively on Nasdaq with an average daily trading volume of 38 million shares. It ain’t till the fat lady sings, but the final debate is not going to be the gamechanger for Trump. Barclays will be the morning’s main event in the U.K., the first large British bank to report following positive surprises at UBS and U.S. peers. With the US markets the only liquid market permitting short-selling, capital flooded the US.
As you know already, UPS is on my watch list right now as I believe damage done during the upcoming war with Amazon will leave some scars.


France extended its curfew, the first Covid treatment got FDA approval, and Britain signed its first major post-Brexit trade deal. Meanwhile, negotiations between EU lawmakers and governments over the bloc s budget and recovery fund are set to continue next week, with diplomats fearing delays as unavoidable. Brexit Movement | U.K. and EU negotiators have given themselves three weeks to finalize a post-Brexit trade deal, just days after Boris Johnson described the talks as over.
The deal largely preserves the terms under which the U.K. traded with Tokyo as part of the EU, according to Japan s Ministry of Foreign Affairs. One of the signal errors of the British establishment over the last five years of the miserable Brexit process has been to assume that Ireland isn t really there. But he said it in the days of the full EU/NATO cargo cult. I was right that Boris Johnson would soon cave, and indeed the talks are back on. We ve been following companies preparing for Brexit since the 2016 referendum.
We also publish the Brexit Bulletin, a daily briefing on the latest on the U.K. s departure from the EU. In Case You Missed ItBigger Problems | Leaving the EU was supposed to be the most challenging time for Britain s chief executive officers.