Open: London Session | Forex, Metals, Oil, Agriculture September 16, 2020

Currencies

Losing nearly quarter per cent, the rupee (INR) yesterday closed at 73.65 after marking an intraday low of 73.73 against the dollar (USD). However, I expect that given signs of a recovery in the dollar going forward, the loonie stands to take a larger hit than other major currencies. The rupee witnessed high volatility against the US dollar in opening trade on Wednesday ahead of the US Federal Reserve’s policy decision. Some commentators regard a widening in the trade deficit as an ominous sign for the exchange rate of the US dollar against major currencies in the times ahead.
Moreover, while the CAD/USD has been seeing growth since March, this has largely been due to dollar weakness rather than loonie strength. Goenka further said that “the threshold for the US dollar to weaken from current levels is high as a lot of dovishness has already been factored in. The currency might see some further growth against the U.S. dollar should cases continue to grow disproportionately in the United States.
I anticipate that the dollar will continue to see weakness as long as this remains the case. Indeed it has now returned to almost exactly the level at which it was pegged against the dollar during the financial crisis era. In mid-June, for example, the company closed an offering of €500 million, or approximately $565 million, of 1.250% euro-denominated notes due 2031.

Metals

M&M was the top gainer in the Sensex pack, rising around 3 per cent, followed by Bajaj Auto, Maruti, L&T, Tata Steel, UltraTech Cement and Nestle India.

Oil

Brent crude futures, the global oil benchmark, rose 1.48 per cent to USD 41.13 per barrel. Meanwhile, global oil benchmark Brent crude was trading 1.51 per cent higher at USD 41.14 per barrel. He said he’s looking at energy as a barometer right now and trying to play oil on the long side.

United States

Market participants would expect further clarifications from the US Fed on how average inflation targeting framework would be implemented,” said Abhishek Goenka Founder and CEO, IFA Global. Domestic equities opened on a cautious note tracking mixed cues from global markets ahead of the US Federal Reserve’s policy outcome, traders said. less Domestic equity benchmarks Sensex and Nifty opened on a cautious note on Wednesday tracking mixed cues from global markets ahead of the US Federal Reserve’s policy outcome.
Greer also discussed the growing irrational forces that are driving markets, including the Fed inflating assets, the influx of retail traders, and the recent mania over options trading. Violation The World Trade Organization undercut the main justification for President Donald Trump s trade war against China, saying that American tariffs on Chinese goods violate international rules. It will be interesting to see where the Fed sees the unemployment rate going since it has fallen quickly, but the labor market is still very uncertain.
If they remain at 35, the US stock market will earn 8% per year in this decade. We might see the Fed call for relatively low unemployment (mid-single digits), while still projecting zero percent rates. The Fed probably could try to talk down speculation in stocks, but it’s tough to get the market to listen without being hawkish which it won’t do. (Source: Target Date Solutions and Standard & Poor’s) The US stock market is currently in a bubble, defined as a situation where prices exceed value.

China

While the ruling bolsters Beijing s claims, Washington can effectively veto the decision by lodging an appeal at any point in the next 60 days. Going Tough | Italy has been gradually shifting its stance toward Beijing after the previous government joined China s massive Belt and Road Initiative infrastructure project in March 2019. His comments highlight Beijing s increasing assertiveness against what it sees as unfair treatment from Western governments.

Europe

Italy meanwhile insisted that the bloc shouldn t pull out of trade talks with the U.K. despite Boris Johnson s plan to renege on parts of the divorce accord. Climate Agenda | The pandemic could easily have derailed Christine Lagarde s plan to enlist the European Central Bank in the fight against climate change. Pound Bets | Pound traders betting that the U.K. and EU are bluffing in their latest Brexit dispute are set for a windfall if history repeats itself.
Paris and Berlin seem to think so and would like to see EU competition authorities show a more lenient approach. Ursula von der Leyen will today lay out the EU executive arm’s vision for the post-pandemic world. China’s Response | Zhang Ming, head of the Chinese Mission to the EU, lambasted the bloc’s restrictions on Huawei and accused the U.S. of “economic bullying.” Now it s pledging to march in line with its Western allies, after the U.S. and EU took Rome to task for cozying up to the Asian power.
We also publish the Brexit Bulletin, a daily briefing on the latest on the U.K. s departure from the EU.

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