Open: New York Session | Forex, Metals, Oil, Agriculture August 21, 2020



Wheat sowing for the 2020/21 season ended over the last week, it said, with a final surface of 6.5 million hectares having been planted. MARKET NEWS Chicago soybean and corn futures rose, on course for their second straight weekly rise, although bigger-than-expected U.S. crop yields and dwindling export demand capped gains. Trade transformation | The global wheat trade is being shaken up again after extreme weather hurt crops in the European Union while harvests are booming elsewhere.
1 U.S. corn producer, but the damage still may not do much to shift the outlook for a bumper American harvest. That’s because these are coffee can stocks.


Without reversing higher today, the US dollar will extend its losing streak for a sixth consecutive week against the Canadian dollar. The rapid slide in the US dollar has helped as – per one source – the correlation between a weak dollar and EM outperformance is 65%. MARKET NEWS Gold prices rose after bleak U.S. jobless claims data reinforced fears of a slower recovery from the coronavirus-induced economic crisis, denting the dollar and U.S. Treasury yields.
However, the North American market has been leading the dollar sales, and the intraday technicals warn the euro could recover toward the $1.1840-$1.1850 area. The dollar rose and emerging market economies slowed, and by last year the debt reckoning seemed close at hand. The euro fell 0.4% against the dollar after IHS Markit data indicated a smaller rebound in activity in the eurozone’s manufacturing and services sectors than economists had expected. The broader slide comes from lower usage of dollar swap lines by foreign central banks, and repurchase operations that lend short-term funds in exchange for government securities.
Since the March 23rd lows in the S&P 500, the emerging and international markets have improved, with the weaker dollar helping the last few months. less The EURUSD pair closed higher on Thursday, August 20, with the euro rising 0.20% against the US dollar to 1.1861. Having said that, the US dollar sold off later in the day and thereby allowed the precious metals markets to recover.


The company has delayed the sale process for its Sadiola gold mine in Mali because of political instability in the country, a spokeswoman said on Thursday. In the previous session, gold had slumped 1.8% or Rs 950 per 10 gram while silver had crashed 2% or Rs 1,400 per kg. Gold prices have been volatile in India after hitting a new high of Rs 56,191 per 10 grams. Together with the recent new all-time high for gold, it is also a signal that you will have to wait long for a new bull market for the Dow.
Speaking of gold, note that the media and experts have been taking potshots at Buffett of late for buying a gold mining stock. Near-month gold prices declined for the first week in 10, falling 1.1%, settling at $1,949.80 per ounce. Lower imports by the world’s biggest silver consumer could weigh on global prices that have risen more than 50% so far in 2020. Silver’s third wave down started at the peak after point C (from where it touched the red line).
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). Gold prices are trading down by 0.5% at Rs 51,900 per 10 grams.


BEFORE THE BELL Canada’s main stock index futures fell as a resurgence in coronavirus cases raised concerns of a slow recovery in fuel demand, hurting crude oil prices. Oil prices are down slightly amid efforts by major oil producers to hold back output. On the day, near-month crude oil futures declined after the International Energy Agency cut its demand forecast. Fuel oil inventories fell the most by 127,000 mt to 1.35 million mt, as low refinery runs in the region reduced supplies.
Global oil benchmark Brent crude was trading 0.33 per cent higher at $45.05 per barrel. In early action, WTI crude oil futures -0.75% to $42.50/bbl and Brent crude -0.5% to $44.66/bbl.
The biggest decline: the SPDR S&P Oil & Gas Equipment & Services ETF (XES), which has lost 28.3% a year for the past five years. Meanwhile, gas inventories have shrunk due to curtailments in Appalachian and less oil drilling, which produces a lot of gas as a byproduct. Oil prices dipped on slow recovery in fuel demand. Microsoft Deepens Oil Ties, Helping Petrobras Weather Pandemic Use of cloud computing surges at the Brazilian oil giant.

United States

The economic hit from the COVID-19 pandemic decreased Trump’s favorability and his probability of reelection, but economic improvement between now and Election Day could improve his odds. Notably, top White House economic advisor Larry Kudlow said that the US stock market is experiencing a V-shaped recovery as reflected by performance in the country’s economy. less With less than 80 days ahead of the US presidential election, the impact of polling figures, particularly in battleground states may begin to rattle financial markets.
Biden said another four years of a Trump presidency would result in more small businesses closing and higher virus cases. One must never mention the massive bubble blown up by the Fed in the bonds markets.While the economy burns, the stock markets are literally going bonkers. The Japanese economy, the globe’s third largest (following those of the US and China), shrank by a record 7.8% in the second quarter. Markets may therefore scrutinize President Donald Trump’s speeches, particularly as they relate to foreign policy towards Iran.
That violated regulations that govern electronic funds transfers, the agency said in a statement announcing one of its largest orders against a U.S. lender under the Trump administration. But the election is three months away and things can change.The Trump Administration has been focused on international policy, such as immigration and trade. Less B/S=BadThis seems a good time to check in on the Fed s balance sheet, since one person s moral hazard is another s, well, morale.


However, experts suggest President Xi Jinping s Clean Plates campaign could be focused on reducing China s dependence on food imports in preparation for possible Covid-19 related supply disruptions. Investors’ concerns about a deepening escalation in tensions between Beijing and Washington were eased slightly by the prospect of talks in the near term. The Philippines protested to Beijing over the Chinese Coast Guard’s move to confiscate equipment used by Filipino fishermen in the disputed South China Sea in May.
Beijing s blessing does not clear up the legal fuzziness.


More strikingly, reference rate reforms, massive excess liquidity and the EU recovery fund/support packages have sent the 3-month EONIA/Euribor basis into negative levels that were regarded as unimaginable before. Old EONIA was always higher than the ECB deposit facility rate (DFR), as no Eurozone bank would lend money at an interest rate that is lower than the DFR. The Intelligence and Security Committee (ISC) has urged the government to investigate potential Russian interference in the 2016 EU referendum – a call immediately rejected by the government.
Brexit talks stall again: The EU and U.K.’s top negotiators said little progress has been made this week. EURIBOR and EONIA/EURIBOR BASIS The above-mentioned conclusion holds also for Euribor fixings, as we do not expect ECB rate cuts and the EONIA/Euribor basis is already negative. Mr Seely conceded that the “lack of protection in the Scottish referendum and the lack of protection and care in the Brexit referendum were both wrong”.
The lower bound for current EUR reference rates is not determined by the ECB deposit rate.
Security experts, campaigners and politicians united in criticism after the findings – including of “potential” interference in the Brexit referendum – were dismissed within hours. Looking ahead, the latest comments from senior ECB officials at the start of August underlined that the ECB remains on high alert. This unsecured term rate is about to test the risk-free ECB/Eurosystem deposit facility rate (DFR).