Open: New York Session | Forex, Metals, Oil, Agriculture December 28, 2020

A member of the National Guard plays a trumpet during a flag rai


The Australian Dollar has been a primary beneficiary of the recovery, with iron ore’s rising prices driven largely by Chinese demand helping to boost confidence in Australia’s economy. The rupee appreciated by 4 paise to 73.51 against the US dollar in opening trade on Monday, as sustained foreign fund inflows and strong domestic equities strengthened investor sentiment. The dollar ticked lower while U.S. 10-year bond yields moved closer to 1% driven by rising inflation expectations (breakeven yields).
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.05 per cent to 90.18. The euro traded at $1.2204, a tad below its 2-1/2-year high of $1.22735, while the yen changed hands at 103.56 per dollar. The United States’ dovish monetary stance combined with rising national debt have accelerated the depreciation of the U.S. dollar. As sentiment improved, the US Dollar fell to a one-week low of 90.10 and looked set to continue its downward trajectory.
On Thursday, the rupee had settled at 73.55 against the US dollar.


less Iron ore and copper prices are trading higher this week following China’s National Bureau of Statistics reporting a seventh consecutive month of growth in industrial profits. Even with the recent volatility in prices, gold remains among the best-performing commodities this year to combat the fallout from the coronavirus pandemic. Better than expected Chinese economic data is likely to spur growth in the industrial metals space, particularly iron ore and copper prices.
Tracking firm international prices, gold prices surged today in Indian markets. Gold prices soared 1% to hit the US$ 1,900 mark before giving back some gains, and risk assets rallied broadly following the news. Gold prices are trading up by 0.5% at Rs 50,300 per 10 grams. Note that even though gold has recovered from lows of below Rs 48,000, it remains significantly lower than the August highs of Rs 56,200. Gold remains stuck in a five-month-old downtrend with a break above $1910 needed in order to challenge it.
less Silver has experienced an unprecedented rise this year thanks to the COVID-19 pandemic. President-elect Joe Biden’s $2 trillion Green New Deal proposal will likely bolster the demand for silver significantly.


Saudi seaborne crude exports for last week were seen at 36.9 million bbl (5.3 million bpd) compared to the revised 38.8 million bbl (5.5 million bpd) the week prior. I have worked in the areas of oil refining, natural gas production, synthetic fuels, ethanol production, butanol production, and various biomass to energy projects. Many analysts were projecting a shortfall in oil production for the year, and OPEC had been pretty aggressive in keeping oil prices propped up.
Due to the impact of the Covid-19 pandemic on oil demand, U.S. oil production actually declined in 2020. The discoveries include conventional oil and unconventional oil and gas. Oil prices edged down a tad, with US crude futuresdown 0.8 per cent at $47.85 per barrel. For all of 2019, U.S. oil production averaged 12.2 million barrels per day (BPD). Brent crude futures, the global oil benchmark, fell 0.43 per cent to USD 51.07 per barrel. I have over 20 years of international engineering experience in the chemicals, oil and gas, and renewable energy industries, and hold several patents related to my work.
As a result, OPEC members met with Russia with the hope of announcing additional production cuts that might stabilize oil’s free fall.

United States

After refusing to sign the economic stimulus package and asking the amount to be increased, US President Donal Trump signed off a $2.3 trillion stimulus package. Although the US Congress passed the stimulus package as early as on December 21st, President Trump’s refusal to sign the bill had created much uncertainty over the last week. Treasur-Treasury traders continue to eye the 1% pivotal yield in 10-year Treasuries especially now that a stimulus bill has been signed by President Trump.
US S&P futures last traded up 0.4 per cent.The futures had earlier reversed losses after a cryptic tweet by Trump – “Good news on Covid Relief Bill. after Trump finally signed the stimulus package. Nasdaq Futures are trading up by 72 points (up 0.6%) while Dow Futures are trading up by 142 points (up 0.5%). US stock futures are trading higher today, indicating a positive opening for Wall Street indices. We mentioned previously that stocks could diverge quite significantly from fundamentals amid the massive Fed intervention and the strength of the FANG stocks in the COVID-19 environment.
The high water market from last week for the S&P 500 is the 3,724 level, while the Nasdaq 100 equivalent is 12,789. The Capital Spectator has been quoted by a range of news organizations, including The Wall Street Journal, Reuters and others.


Tighter regulations could be good news if Beijing is going to lay out clear boundaries and rules, helping create a level playing field. For Eisenman, Asian countries are apparently, “chafing under Beijing’s aggressive economic embrace.”


Elsewhere, sterling is curiously sideways after the last ditch agreement that will avoid a hard Brexit.