Open: New York Session | Forex, Metals, Oil, Agriculture January 19, 2021

Traders sold 12.75 million tonnes of wheat, 10.52 million tonnes of corn and 3.89 million tonnes of barley, the data showed.

• Prospects of additional stimulus bode well for inflation hedge gold, although US Dollar strength (UUP) has dampened demand for the yellow metal. That surge disrupted years of planning by corporations and governments, which had anticipated a relatively weak dollar, something that seemed like the new normal for almost a decade. In FX the story remains status quo with investors still bearish on the dollar as risk flows continue to be the dominant theme.
EU eyes dollar’s global dominance in bid to bolster the euro. However, it’s sustainability depends on low interest rates which depend on low inflation which depends on a stable dollar. Gold bulls will be looking for comments that may pause the recent dollar and yield rise. The dollar was weaker on same risk flows with EURUSD up about 40 basis points and cable up 33 pips. A similar climb would take the dollar into rarefied territory seen only between 2000 and 2002. The ICE Dollar Index rose by as much as 25% from the spring of 2014 to the spring of 2015.
For one, the dollar’s decline in 2020 was far smaller than its mid-2000s plunge.

Iron ore imports by the world’s second-largest economy hit a record high in 2020 as it spent big on infrastructure to trigger an economic rebound from the coronavirus pandemic. Manufacturing activity has rebounded faster than anywhere else and China’s imports of metals such as copper and aluminium have been running at record highs. less Gold markets pulled back a bit during relatively thin trading on Monday due to the Martin Luther King, Jr. holiday. In his writing and research, Sumner specializes in monetary policy, the role of the international gold market in the Great Depression, and the history of macroeconomic thought.
S&P 500 futures pointed to plenty of green at the open, the 10-year Treasury yield was at 1.118%, oil held above $52 a barrel and gold gained. It found speculators had cut bullish gold bets by 31% to near the lowest since June 2019. • After testing $1,800 Gold (GLD) extended its recovery to $1,840 where it has stalled ahead of the keenly awaited appearance US Treasury Secretary Janet Yellen’s hearing.
The impact of recent gold weakness was visible in the COT report covering the week to January 12. Gold markets have been battered as of late, but so far, we have been respecting the 200-day EMA as seen back in November. Gold trades +0.1% at $1,840 at the time of writing having picked up from support at $1,800.

To view the full Middle East crude oil report click here (link to be pasted in Eikon search) You can access the full report here. The International Energy Agency will release its monthly Oil Market Report later today with the market focusing on its demand outlook. This has also resulted in Asian refiners soaking up barrels of CPC blend crude oil as the grade is rich in Naphtha. Canada s major oil producing province of Alberta has applied pressure on the federal government to raise the issue with the US President elect.
The pipeline is a key aspect for Canadian producers to transport oil into the USA as against more expensive rail networks. April ICE Brent futures were $0.68 higher at $55.28/bbl, while the rest of the 48-month forward contracts traded between $0.18 and $0.61. February 92 RON-Brent cracks were $0.12 higher at $4.04/bbl; 2Q ’21 traded $0.08 higher at $4.75/bbl while the 2H Cal ’21 advanced $0.21 at $4.45/bbl. On Tuesday morning trade, prices recovered and were seen higher with Brent trading at $55.17/bbl, up 0.8% and WTI seen at $52.39/bbl, up 0.1% as of 0730 hrs GMT.
Front month March WTI futures were up $0.59 at $52.58/bbl, with the other 49-month forward contracts traded between -$0.06 and $0.50.
February CFR naphtha-Brent cracks were $0.28 lower at $2.58/bbl; 2Q ’21 traded $0.05 lower at $0.97/bbl while the 2H Cal ’21 advanced $0.18 at -$0.31/bbl.

less Last week, Fed officials threw cold water on incipient taper talk, making it clear they would continue to purchase treasury securities. The Fed’s intervention, which included cutting interest rates and buying billions of dollars worth of bonds, helped fuel a recovery. The Federal Reserve buying bonds represents a swap of long-term government liabilities (Treasuries) for short-term government liabilities (reserves held at the Fed). Although after Fed officials intervened, last week’s candle left behind a long upper shadow on the weekly.
Fed officials were reacting to a mini selloff in bonds in the prior week. Today, Wall Street continues to use Zacks research including the Zacks Rank and Zacks Equity Research, which combines the best of quantitative and qualitative analysis. There is less prospect of that this time: Federal Reserve Chairman Jerome Powell says he wants the Fed to signal any tapering well in advance. Spending on the border wall will stop, taxes will increase on higher earners and corporations, and it looks like Wall Street regulation will get tougher.
It doesn’t matter whether the Fed is buying bonds or shrinking the balance sheet. Trump isn’t expected to pardon himself, family or close aides.

As EU countries top 1% of the population vaccinated, the UK is at almost 7% and is vaccinating nearly 0.4% per day recently.