Open: New York Session | Forex, Metals, Oil, Agriculture February 04, 2021



MARKET NEWS U.S. corn futures edged higher, hovering near a more than seven-year high, as the market awaited data expected to confirm strong Chinese demand for U.S. supplies. There is likely to be a modest increase in coffee prices especially in the second half of the year. Brazil — by far the world’s largest producer and exporter — is forecast to harvest a much lower crop for 2021-22 because of weather-related challenges, mainly excessively dry weather.
But coffee could be an exception because of supply shortfall and demand revival operating together. Global coffee market is tightening. Moscow is trying to reduce wheat exports to help curb rising domestic food prices.


Thus, the dollar looks to strengthen from here and so, the dollar index can touch 91.50 and possibly move towards 92.00 in the short term. Emerging market stocks (EM) benefited from a weak dollar and related translation effect in the fourth quarter like their developed market counterparts. CMC Markets’ chief market strategist Michael McCarthy noted that the strengthening of the dollar is a major driver of precious metals’ prices. Emerging market sovereign debt very often is issued in U.S. dollars and benefits when the dollar weakens vs. the local currency of the issuing country.
Markets mixedThis week’s move higher in global equities is running out of steam a little today, as corporate earnings rolled in and the dollar rose. Copper prices rose on Thursday on expectations of further stimulus from the United States, but a firm dollar limited gains in the London market. less On Thursday, gold and silver prices declined on a stronger dollar in early European trading.
Emerging market bonds benefited from a weaker dollar and positive economic developments in Q4 2020. The Indian rupee ended unchanged at 72.96 (provisional) against the US dollar on Thursday even as the domestic equity markets scaled fresh highs. For the Indian currency, strong dollar is being countered by significant foreign inflows and so, the likelihood of it staying flat or tracing a rectangular pattern is high.


Gold and silver prices today edged lower in Indian markets today amid a slide in rates of precious metals in global markets. Spot gold is currently trading at $1,825.14 per ounce as of 0734 GMT, while spot silver is trading at $26.64 an ounce. The Bureau of Indian Standards in 2020 notified good delivery standards for gold and silver in the country as per IS 17278. Lachlan Shaw, the head of commodity research at the National Australia Bank, added that another factor affecting gold prices is the strong economic recovery resulting from the vaccination.
The refiner sold more than 1.1 million troy ounces of silver last month, its highest since October, it said in a blog post. Gold prices are trading down by 0.7% at Rs 47,400 per 10 grams. Thus, uncertainty in vaccine rollout and the emergence of new COVID-19 strains could be supportive of gold, he said. Silver support at $26 with gold looking at $1805 and $1775. He is an analyst at which is a website aimed at offering quality analysis of gold prices.
On MCX, gold futures skidded 0.6% to Rs 47549 per 10 grams, extending losses to the fourth day.


The Anglo-Dutch oil major’s annual profit slumped 71% to $4.8 billion as its oil and gas production and profits from refining crude into fuels dropped sharply. U.S. crude stockpiles fall, gasoline inventories surge -EIA U.S. crude oil stockpiles fell while gasoline inventories jumped unexpectedly, the Energy Information Administration said on Wednesday. Oil majors could get a boost from solid oil prices & earnings from RDSB in focus. Crude oil inventories in the USA fell by 994,000 bbl to 475.7 million bbl in the week to Jan 29th.
less Oil prices are surging this week on declining inventory levels, OPEC+ developments, and an improving global economic outlook.
The US Energy Information Administration’s petroleum report for the week ending January 29 showed a 994k crude oil inventory draw. Along with oil prices, markets are reflecting optimism in fiscal stimulus bets through the 10-year Treasury yield as investors move away from the safety of US government bonds. He argues that President Biden’s policy priorities will contribute to a boom in oil prices, and other industrial commodities.His basic argument has a few parts.
Energy giants view these efforts as balancing customer demands for more oil and gas while fitting in a lower-carbon energy world. OPEC+ kept its oil output policy unchanged on February 3 after its meeting of the Joint Ministerial Monitoring Committee (JMMC) concluded.

United States

Nasdaq Futures are trading down by 4 points (flat) while Dow Futures are trading down by 47 points (down 0.2%) The rupee is trading at 72.90 against the US$. In any case, the new refunding strategy should be viewed as positive USD liquidity news and could prove to be a marked change of scenery from the Mnuchin era. US stock futures are trading lower today, indicating a negative opening for Wall Street. WSJ analyzed how Reddit posts, YouTube videos and tweets by personalities including Elon Musk spread online and fueled a trading craze that turned Wall Street upside down.
Armed with the info above, last week’s investors saw the Nasdaq 100 (NDX) falling despite much better than expected earnings. The US ISM Services employment sub-index hit 55.2, suggesting strong employment gains and the highest reading since pre-pandemic outbreak in the US. Judging by how Nasdaq 100 closed last Friday, at its lows, one would say that the earnings did not matter.
So, direct checks, and other forms of wealth redistribution under Biden, will grow the economy faster than, say, the Trump tax cuts. FTSE futures point to a weaker open after a flat session on Wall Street and a weaker showing in Asia. WallStreetBets has been hit by bots that question some of the members’ investing initiatives and pitch commission-free brokerage accounts, according to a Wall Street Journal analysis of the posts.


Solar Firms Eye Supply Tracing Concerns mount over forced labor in China s Xinjiang region.


ECB RATES With regard to Draghi’s former employer and its key policy rates, we continue to think the ECB will not cut the deposit facility rate. €STR fixing, lowest and highest contributing rates and ECB deposit facility rate, % €STR is set to edge down very gradually when the excess liquidity increases. While we think the ECB is unlikely to cut rates this year, rate hikes seem even more unlikely. Currently the 8th ECB €STR forward is pricing in some 4bp rate cut, down from 8bp last week when the ECBspeak/reports ignited some rate cut speculazione.
Italy – Germany 10-year yield spread, bp It’s also worth noting that bond vigilantes never really challenged the ECB’s buying machine amid the latest political crisis. David J. Merkel, CFA — 2010-present, I run my own equity asset management shop, called Aleph Investments. EUR short-term rates, % As my colleague pointed out, the ECB recommends banks not to pay dividends, i.e. David Merkel is an investment professional, and like every investment professional, he makes mistakes.
On the other hand, one could argue that the ECB will not allow big banks to fail in this crisis.
By now, I have built up excellent skills and experience in analyzing macroeconomic and political developments in Europe, the Eurozone and Germany, including ECB watching.