Open: New York Session | Forex, Metals, Oil, Agriculture February 26, 2021



In its monthly update, the inter-governmental body increased its global wheat crop forecast by 5 million tonnes to 773 million tonnes. Cocoa futures on ICE closed sharply higher on Thursday, with New York hitting a two-month high, helped by a weaker dollar, while arabica coffee hit a fresh one-year high. Prices of canola hit all-time highs this month, rallying with oilseed rival soybeans, on brisk Chinese buying to produce feed for that country’s rebuilding hog herd.
However, the recent uptrend in new-crop beans has been stronger as the oilseed battles for U.S. acres against competitors like corn, cotton, sorghum and wheat. CBOT soybean futures hit contract highs on Thursday, both in the most actively traded May contract and in the new-crop November one.


Both the dollar and yen are traditional haven currencies, but the yen tends to decline when US yields rise, whereas the dollar tends to strengthen. FOREX: The U.S. dollar rose against most major currencies, lifted by an increase in U.S. bond yields overnight, while the pound dropped to its lowest in over a week. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.25 per cent to 90.35. The U.S. dollar held gains after rebounding overnight from three-year lows following a spike in U.S. bond yields.
The Canadian dollar weakened 0.1 per cent to C$1.2620 after falling from its own three-year top to the greenback at C$1.2468 overnight. The Australian dollar continued its retreat after topping $0.80 on Thursday for the first time since February of 2018, declining 0.6 per cent to 0.78195. The third factor that may play in favor of bonds – thus against higher yields and the dollar – is end-of-month flows.
“The decline in bonds spooked equities,” leading to “classic US dollar safe-haven support,” he said. After a big rally for both benchmarks earlier in the week, a strengthening dollar is weighing on further gains. The gold price is down about 7% (in US dollar terms) since its year-to-date high set on January 6.


less Since we called for a bottom a few weeks ago, Gold and gold stocks have tested that call. The lithium and borax miner said net loss after tax widened to $29.1 million for the half-year ended Dec. 31, from $18.9 million last year. The same may be true for Gold, so keep an eye out for a major confluence of support at $1690 to $1700, should Gold falter here. Gold and gold stocks rebounded but then appeared to begin another leg lower. The gold stocks are oversold enough and corrected enough for a bottom to form, but ultimately, only price action can confirm.
We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Perth and soon Dubai. This did little to inspire a further rise in the gold or silver price. Gold struggled in Indian markets for the fourth day in a row and remained near 8-month lows. Checking futures now, everything’s in the red, including gold, stocks, and oil.
less The two-day rise in the gold price of more than US$50 fizzled out on Tuesday.


Malaysia’s Petronas falls to fourth-quarter loss Malaysian state oil firm Petronas fell to a fourth-quarter loss on Friday hurt by lower oil prices and demand. Alberta’s 2020/21 deficit stood at C$20.2 billion, compared with a C$24.2 billion deficit projected in August, as recovering crude oil prices help the province narrow its deficit. I have worked in the areas of oil refining, natural gas production, synthetic fuels, ethanol production, butanol production, and various biomass to energy projects.
Brent crude futures, the global oil benchmark, fell 0.39 per cent to $66.62 per barrel.
After declining a bit a decade ago due to high prices, oil consumption in the U.S. has once again been on the rise (excepting last year’s pandemic-related collapse). 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. The asset manager recently made moves to buy billions of dollars of gas and oil infrastructure in Canada, India and the Middle East. Fuel oil stocks showed a drop of 22,000 mt to 1.64 million mt.
Refinitiv Oil Research aw imports from East of Suez to Northwest Europe (NWE) came to a halt this week, bringing total import volumes for February to 674,000 tons. At 0900 GMT, the front month Brent futures contract on the ICE was hovering around $66.15/bbl, down by 1.09% compared to yesterday s settlement.

United States

He said the Fed wouldn’t raise interest rates until inflation had exceeded 2%, a situation that could take more than three years to transpire. “We have the Fed not only saying they’re willing to allow inflation to rise, they’re actively looking for above-target inflation. Commentators searched for signs the Fed is changing its stance to one of tighter policy in order to ward off inflation taking hold. Bond yields have climbed this year on the outlook for massive fiscal stimulus amid continued ultra-easy monetary policy, led by the US.
The Fed’s new policy framework means Powell wants inflation to run above 2% for a while. Of course, this is all because of the fact that stronger data means recovery and recovery means no more free money from the Fed. Since March the US stock market, fuelled by aggressive monetary and fiscal easing, has shot to new all-time highs. “Hence the market isn’t pricing in an inflation surge and it’s got a lot of faith in the Fed’s ability to address it.
But long term the Fed’s 2% average inflation regime is still in place. less The market could care less about a solid round of data out of the US on Thursday.


So, nominal rates rising hand in hand with breakeven inflation rates would not worry the ECB too much. Britain and the EU are nearing agreement on how to cooperate on financial market rules a first, limited step toward working together after Brexit. With 10-30-year rates moving in a parallel fashion and the ECB controlling the short end by forward guidance, steepening may occur in the 5-10-year sector. Reacting to the rapid rise in yields, ECB president Lagarde and chief economist Lane said the ECB is closely monitoring long-term nominal bond yields.
It remains to be seen how and how long the ECB can control (ultra)-long rates in this reflation euphoria. EUR 30y swap, % In the 10-year rate, the 20/23bp area represents the key resistance area (2020 highs, Brexit vote lows). Market participants have been counting on the ECB’s bond purchases and financing conditions control, perhaps too much. In line with this, ECB €STR forwards ended up at around -56.5bp yesterday, i.e.
The ECB did not cut the DFR in the most severe phase of the Covid crisis.