Open: London Session | Forex, Metals, Oil, Agriculture September 09, 2020



3) Coffee prices tend to rise in September, before October and the start of the next Brazil coffee bloom. I predicted that coffee prices would move to the upside a few weeks ago. 5) Six months ago, my forecast was that drought would hurt the Vietnam coffee crop. How quickly La Nina forms and what the AAO index does will have a huge impact on coffee prices in the weeks ahead. Coffee prices would trend to at least $1.50-1.70 if October-November is drier than normal with heat.
Coffee prices were under pressure on Tuesday due to the stronger dollar and a short-term overbought situation. Crop Watch corn and soybeans slid for the fifth consecutive week as dry weather continued its dominance. If it does not rain in northern Brazil by mid-October, coffee prices could challenge the $1.50 area or higher. However, compared to 20 years ago, the Brazilian coffee area is much further north, closer to the Equator. In key Brazilian coffee areas, September rainfall will be far below normal (10% of normal).


Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.02 per cent to 93.46. If major world powers dumped their Treasury holdings and stopped accepting U.S. currency in international trade, the U.S. dollar’s privileged status and value would collapse. The rupee depreciated 13 paise to 73.73 against the US dollar in opening trade on Wednesday tracking muted domestic equities and a strengthening American currency.
Forex traders said a strong dollar, muted domestic equities and sustained foreign fund outflows weighed on investor sentiment. For now, the decline of the dollar appears likely to proceed at a more gradual pace. The dollar was steady, Treasuries edged up and gold slipped. The rupee had settled at 73.60 against the US dollar on Tuesday. Eurostat, the record-keeping arm of the European Union, reported its revised reading of second-quarter GDP showed an 11.8% contraction for the countries that use the euro currency.
This marks the second billion-dollar investment by Silver Lake in a Reliance Industries subsidiary after the $1.35-billion investment in Jio Platforms announced earlier this year. Holders of low-yielding U.S. dollar-denominated debt instruments should be quite concerned about the prospect of losing purchasing power.


The way the companies outperformed gold and its digital counterpart Bitcoin highlights the old adage that it’s smartest to be selling shovels in a gold rush. If there was a big move away from risk, we would expect outright gains for the asset classes most widely regarded as havens long Treasuries and gold. Gold and Bitcoin have been overtaken as good investments over the past year by companies with exposure to blockchain technologies, writes Tim Culpan for Bloomberg Opinion.
Since posting new record highs in early August, the gold market has consolidated above $1,900/oz support. Silver Lake’s investment will translate into a 1.75 per cent equity stake in RRVL on a fully diluted basis. Silver, in turn, could be expected to run to new multi-year highs above $30/oz. “Reliance Industries Ltd and Reliance Retail Ventures Ltd (RRVL) announced today that Silver Lake will invest Rs 7,500 crore into RRVL, a subsidiary of Reliance Industries,” the statement said.
The laggards were ONGC, Tata Steel, SBI, HCL Tech and Bajaj Auto.


Brent crude futures, the global oil benchmark, fell 0.45 per cent to $39.60 per barrel. Malaysian palm oil futures slipped, following the previous session’s sharp gains, after crude prices fell and as concerns over rising production also pressured prices. Since June this year, Indonesia has collected a maximum $55 levy per tonne on palm oil exports, regardless of the price. Contagion may be setting in on Tuesday, with the global benchmark for the price of oil down some 3% as of 8 a.m. to trade at $40.61 per barrel.
Demand concerns are putting pressure on the energy market, with Brent threatening to drop below the $40 per barrel mark in early trading on Tuesday.
Motor club AAA finds a national average retail price of regular unleaded gasoline at $2.22 per gallon, about 13% lower than the same time last year. Oil continued to extend losses amid growing doubts about global demand and with the drop in stocks undermining sentiment. Brent crude oil, meanwhile, is nearly 40% less than it was at this point last year. The drug setback dealt a blow to oil by triggering concerns about global economic recovery prospects.
Low retail gasoline prices and a complacency may have brought some demand back for products in the US economy, though those gains will be temporary.

United States

European futures edged lower, but U.S. contracts rose, with Nasdaq futures pointing to a rebound. The Trump administration announcement of the actions, initially expected on Tuesday, has been put off until later this week because of “scheduling issues,” a CBP spokesman said. Demand becomes a particular issue in the US economy, with the long holiday weekend marking an unofficial end to summer. Nasdaq futures have settled down going into Wednesday and investors are left nursing their wounds.
Despite loud claims by Iranian officials and state-linked media, Iran is in fact not interested in an open military confrontation with the US-Israeli alliance. Today, Wall Street continues to use Zacks research including the Zacks Rank and Zacks Equity Research, which combines the best of quantitative and qualitative analysis. Conservative pundits applauded Trump’s action as a step forward in the “culture wars”, but it’s really much more than that. Inflation rates may be set to accelerate as the Fed aims for an “average” of 2%.
An AstraZeneca spokesperson confirmed the pause in vaccinations covers studies in the US and other countries. Since the launch, more than 1,100 applications have been seen, nearly half of the applicants are from the US, UK, and Canada.


Notably he also rebuffed calls to hold cooperative dialogue with Belarus’ opposition Coordination Council, saying This after European Union leaders are urging “dialogue” between the two sides. Boris Johnson’s threat to break international law over Brexit was also slammed by members of his own party. German car industry leaders emerged from a two-hour video conference with Angela Merkel empty-handed as the chancellor continued to resist calls for more state support for the sector.
What to Keep an Eye On Irish Foreign Minister Simon Coveney said he’s gravely concerned that the U.K. may undermine the Brexit deal. Much ink has been spilled on Turkish ambitions in the Mediterranean, while French President Emmanuel Macron tries his hand at international architecture ahead of elections in 2022. There was no shortage of big reports about the prospect of a pandemic, and yet the virus found the EU woefully unprepared. After a meeting with the heads of BMW, Daimler and Volkswagen, Merkel’s spokesman issued a statement committing only to further discussions of ways to support the industry.
Unless the U.S. removes duties imposed over unlawful subsidies to Airbus, the EU would retaliate with its own set of levies, he said in an interview.
Without some rabbit out of the hat, in the form of a compromise over Brexit, or a tamping down of the pandemic, it will likely continue to do so. The bloc s Brexit negotiators, who are in London for another difficult round of talks, are unlikely to be impressed.