Open: New York Session | Forex, Metals, Oil, Agriculture August 12, 2021

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Agriculture

As the current marketing year coming to an end, AISTA said there is an urgent need for a timely announcement of the sugar export policy for the next year. An additional 6,78,237 tonne of sugar is in transit for delivery to port-based refineries, it said. An additional 8,00,000 tonnes of sugar has been contracted under the OGL (open general license) route without subsidy support. This shall help India to widen its market and create a premium for Indian sugar,” it added.
About 2,02,521 tonnes of sugar is under loading.

Currencies

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.05 per cent at 92.87. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. The dollar eased 0.07 per cent to 110.355 yen, continuing to pull back from a five-week high of 110.80 reached overnight. less Because of this, the US dollar sold off after that announcement, as a lot of traders were worried about inflation getting out of control.
This, along with the yield on US bonds, could affect the US dollar and add some trading momentum to the GBP/USD pair. On 11 August, gold prices gained amid profit-taking in the dollar index after US CPI data. In the foreign exchange market, the Scandis are firmer, while the dollar bloc is softer. However, the sluggish movement of the US dollar continued to provide some support for the GBP/USD pair. In the previous session, the rupee had settled at 74.44 against the US dollar.
In the aftermath, US Treasury yields fell, counteracting the dollar.

Metals

Gold prices were trading lower in domestic markets today following a muted trend in international spot prices. In international markets, spot gold was flat at US$ 1,750.3 per ounce having recorded its biggest one-day percentage gain since 6 May on 11 August, a Reuters report said. In 2002 when gold was $300 per ounce, MAM recommended to its investors to put 50% of their investment assets into physical gold stored outside the banking system. Gold was flat in domestic markets today following a muted trend in international spot prices.
Gold prices for the latest contract on MCX are trading on a flat note today at Rs 46,360 per 10 grams. Gold prices are trading up 0.1% at Rs 46,452 per 10 grams. To know more about gold, check out our article on how to invest in gold here: How to Invest in Gold? less The gold market has no shortage of issues following Sunday evening’s “flash crash” that saw prices drop sharply at the open. The GoldSwitzerland Division was created to facilitate the buying and storage of physical gold and silver for private investors, companies, trusts and pension funds.
You can see the marked divergence in the last few months with transports not confirming new highs in the SPX: Next, we look at SPX vs Gold.

Oil

The IEA cut its 2021 global oil demand growth forecast by 100,000 barrels a day, while upgrading its 2022 forecast by 200,000 barrels a day. Global oil benchmark Brent crude futures rose 0.04 per cent to $71.47 per barrel. The world’s thirst for oil is still expected to return to pre-pandemic highs in the second half of next year, the report said. US crude oil stockpiles fell modestly last week, out of step with forecasts, while gasoline inventories dipped to their lowest level since November.
less Oil has made a move in the 78.6-88.6 zone and we could see a drop soon. Strengthening crude prices in the international market, however, kept the rupee surge in check.
It was the culmination of yearslong frustration over the oil major’s handling of shareholder feedback. September WTI marginally extended the two-day rally but stalled near $69.60.

United States

However, many analysts still expect the Fed to announce a tapering of stimulus this year, potentially as soon as next month. Biden promised that, after four divisive years under Trump, America would take back the mantle as a defender of the global order, including on human rights. We expect that aggressive central bank policy, high commodity margins and domestic tourism to partly mitigate risks for Brazil and Mexico as the Fed begins its tightening phase.
less The Nasdaq 100 initially tried to rally on Wednesday but gave back the gains as the market continues to look a bit sloppy. Inflation eased in some areas where Fed policymakers had indicated price pressures would likely prove temporary, such as used cars. The Fed is “likely to take some comfort” from the CPI report, David de Garis, an analyst at National Australia Bank, wrote in a note to clients. Several signs of cooling inflationary pressures were evident in Wednesday’s US CPI report, which relieved fears that the Fed will withdraw its stimulus soon.
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. Nasdaq Futures are trading down by 32 points (down 0.2%) while Dow Futures are trading down by 5 points (flat). Asian share markets failed to follow a strong close on Wall Street with fears about the spread of the Delta variant of the coronavirus weighing on sentiment.

China

China has in the past seemed sympathetic to Japan’s claims, partly because Beijing had its own territorial disputes, but more recently appeared to signal support for Russia’s claims. While Modi’s reelection is coming up in 2024, another one of Merkel’s familiar faces, Chinese president Xi Jinping, already made provisions to extend his reign for longer. Investors have become concerned about falling commodities demand in China, where Beijing authorities last week canceled all large-scale exhibitions and events for the remainder of August.

Europe

Eight Japanese premiers made their introductions to Angela Merkel (and she to them), also including one returning one, Shinzo Abe. During her time in office, Merkel became known as one of the most powerful and influential women on the planet. Abe had the longest consecutive term of any Japanese prime minister opposite Merkel between 2012 and 2020. Manmohan Singh shared 8.5 years in office with Merkel from 2005 to 2014.

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