Open: New York Session | Forex, Metals, Oil, Agriculture August 20, 2020



Shares of most sugar companies were trading on a positive note even as the government raised sugarcane floor price by 3.6%. Moving on to stocks specific news, sugar stocks were in focus today. Over two decades ago Jay got his start at the Kansas City Board of Trade in the Wheat Futures pit. That’s because these are coffee can stocks.


Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. For many of these companies, every dollar that gold goes up is a direct addition to their bottom line without incurring any further costs. Indeed, one of the strongest drivers of U.S. dollar strengthening since 2014 has been the country’s above-potential GDP growth amid a period of greater global uncertainty.
The small size investment tranches available in the $dollar stock make it easy to manage the size of capital tranches you may wish to speculate with. The committee also pushed back on talk of yield curve control, allowing the US dollar room to pick-up from a 2 year+ low. All of this seemingly a function of central bank and government stimulus efforts, with an added twist of US administration soft Dollar policy. (FXB,UDN) The recent ten big-figure rally in GBP/NZD came to a halt Wednesday as the Kiwi dollar picked up a bid against a range of currencies.
This unleashed profit-taking on some of the large moves in equities, the dollar, and gold. Mr. Lowe told a parliamentary committee recently a lower Australian dollar was preferable as it would support the economy. The U.S. dollar made gains, while U.S. gold futures dropped.


Hubert is an independent gold and silver analyst who specializes in fractal analysis and the fundamentals of gold and silver . … more Hubert is an independent gold and silver analyst who specializes in fractal analysis and the fundamentals of gold and silver . We constructed 450 separate portfolios that contained equity, debt, and various combinations and weightings of the four exchange-traded precious metals: gold, silver, platinum, and palladium. Silver’s outperformance relative to gold comes with significantly higher risk.
As an example, adding 10% of gold to a portfolio raises that portfolio’s Sharpe ratio to 0.43 from a Sharpe ratio of 0.34 for a stock-and-bond-only portfolio. The precious metals stocks as per the Gold Bugs Index, the HUI, started the year at 240 and today it is standing at 353 registering a sparkling improvement. The long-term median volatility of gold prices stands at 15.3%, compared with 25%, 20%, and 27% for silver, platinum, and palladium, respectively.
The greatest benefit to the risk-return profile of a portfolio was achieved by the addition of only gold to a portfolio of stocks and bonds, however. This is how gold and silver make up for the underperformance, relative to the Dow, that is created as a result of central bank credit extension (as previously discussed). Based on our studies, gold’s relatively low volatility compared to its precious metal peers makes it the best addition to a portfolio.


Higher oil prices and a tax relief package pave the way for new oil investments. Crude oil prices were lower early in the trading day on Wednesday after estimates showed a mixed bag for inventories of petroleum products in the United States. Liquidity will be important for National Oilwell and other oil services firms as the oil market may not recover for several more months. Crude oil prices rose as EIA inventory data showed gasoline stocks unexpectedly shed 3.3 million barrels last week.
The consistency of the draws on US crude oil levels suggests a rebound in demand, though gasoline inventories told another story. BEFORE THE BELL Canadian main stock index’s futures fell as oil prices weakened after resurgence in cases of COVID-19 stoked concerns about a slowdown in recovery of fuel demand. The fragility of the global economy suggests the price of oil will remain stuck where it is, though could add a bit of a risk premium. The double whammy much less severe Oil prices plummeted in the aftermath of the coronavirus pandemic, from around $60/bbl in February to around $20/bbl in early April.
The on Tuesday reported that total US crude oil inventories fell by some 4.3 million barrels during the week ending August 14.
Overall, the estimates were revised up for both years, supported by both higher oil prices and the tax relief package.

United States

This time, however, nominal yields have not moved much, and real yields have instead hit new lows in the US, as inflation expectations have risen. The Fed also believed that another round of fiscal stimulus would be coming and was clearly counting on more active support from elected officials to revive the economy. Some officials signaled that more stimulus from the central bank could also be required, though the Fed didn’t offer clues on when additional tools would be deployed.
The decline of physical money attributed to the virus pandemic has also been seen in the US over the last two months. While Obama never expected Trump to share his views or preserve his policies, Obama said he had hoped Trump would find “some reverence” for the office he holds. In other words, both the Fed and the ECB will likely strive to keep also longer bond yields relatively low for a long time. Increased government spending, combined with measures from the Fed to make borrowing cheap, would drive the recovery and boost inflation, according to Mr. Bell.
International travel won’t resume until mid-2021 as virus flare-ups keep borders closed, Qantas CEO Alan Joyce said, reporting the airline’s first loss since 2014. Barack Obama’s speech in particular elicited an angry, all-caps Twitter response from the president, after his predecessor accused Mr Trump of “treating the presidency [like] one more reality show”. The one big exception came in 2012 when the Fed s promise of QE Infinity brought real yields to a new low, while bank stocks rallied.


China’s economic recovery is helping the Aussie strengthen, after Beijing countered the effect of the pandemic with stimulus measures targeted at infrastructure and construction projects. Australia campaigned for a global investigation into any missteps early in the coronavirus crisis that contributed to the pandemic, angering Beijing. If Huawei truly goes under, however, that would further accelerate Beijing’s push to create its own semiconductor industry.


The intelligence committee’s call for an urgent investigation into “potential” Russian interference in the Brexit referendum has been dismissed by ministers within one hour. But Mr Raab said: “We have seen no evidence of successful interference in the EU referendum. Also boosting the European stocks is the European Union’s €750 billion ($888 billion) stimulus plan aimed at bolstering the bloc’s economy that was passed last month. It was launched after the revelation that Russia-based Twitter accounts posted more than 45,000 messages about Brexit in just 48 hours during the 2016 referendum.
The ECB has started to emphasise that the future of its Pandemic Emergency Purchase Programme (PEPP) is tied to the inflation outlook rather than the continuance of the pandemic. The ECB has earlier seen 1.20 as a clear line in the sand, which was e.g. Could the ECB opt for verbal intervention to prevent EUR/USD from moving above 1.20? Today, investors will assess the ECB account of monetary policy meeting.
The big question is if the ECB will be afraid of “allowing” EUR/USD to move above 1.20. EUR/GBP remains sensitive to the Brexit negotiations.