Open: New York Session | Forex, Metals, Oil, Agriculture January 29, 2021



MARKET NEWS Corn prices advanced and were set for their biggest weekly gain in nearly seven months, buoyed by rising demand and tight supply in major importer China. In an initial projection in November, the USDA had forecast an increase in the soybean area and slightly lower corn acreage in 2021. But this season Argentina’s famously fertile Pampas farm belt has been stricken by months of unusually dry weather.


The dollar index gained 0.2 per cent to 90.757 in the Asian day, bringing its weekly rise to 0.6 per cent. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.31 per cent to 90.73. FOREX: The dollar gained and risk-sensitive currencies fell after an assault on hedge-fund equity short positions in the United States rattled investor confidence and boosted demand for safe-haven currencies. The free money appears to be going to the stock market and safe havens, such as the dollar, short term.
When risk appetite goes up, players start buying into equities and high-risk assets, ditching the dollar and yen. But the short squeeze combines with recent dollar strengthening, and moves in Fed funds, to reflect increased risks of policy tightening. EUR/USD shot higher amid falling demand for the safe-haven dollar which is the result of the decisive US elections and more importantly, the breakthroughs in coronavirus vaccines.
“The overall trend does reflect these supply issues around the US dollar,” said Michael McCarthy, chief strategist at CMC Markets in Sydney. “The US Dollar Index started higher this Friday morning in Asian trade. The rupee appreciated by 7 paise to 72.98 against the US dollar in opening trade on Friday, tracking positive domestic equities.


Gold sat at$1,842 an ounce and oil prices were steady, with brent crude futures last up 0.1 per cent at $55.60 a barrel. On MCX, gold futures rose 0.3% to Rs 48,749 per 10 grams following overnight gains in global markets. He follows regularly since 1970 the gold, silver and foreign exchange markets. Fabrice shares his thoughts on the economy, stock markets, geopolitics, gold and silver. He follows and analyzes the gold and silver markets since 2008. Here’s what the GATA folks said about that, “Former CFTC exec who couldn’t spot gold and silver market rigging to head SEC….” I find this news preposterous!
Canada’s First Majestic Silver was halted briefly in New York after shares rose more than 30 per cent. >> Fabrice Drouin Ristori on Twitter is an independent investment analyst and studies the gold and silver market and their future role in the international monetary system. Even with the recent volatility in prices, gold remains among the best-performing commodities this year to combat the fallout from the coronavirus pandemic.
Gold prices are trading up by 0.6% at Rs 48,911 per 10 grams.


Malaysian palm oil reversed earlier losses to trade 1.6% higher, as higher tariffs on Indonesian crude palm exports made the edible oil from Malaysia more attractive. Brent crude futures, the global oil benchmark, rose 0.02 per cent to $55.52 per barrel. In contrast, fuel oil stocks showed a build for the third consecutive week, increasing by 83,000 mt to 1.45 million mt. Crude oil prices are likewise idling, with the WTI contract stuck below the $54/bbl handle for the better part of two weeks.
Biden on Wednesday unveiled a series of actions to combat climate change, including pausing new oil and gas leases on federal land and cutting fossil fuel subsidies. Refinitiv Oil Research is tracking a potential 148,000 tons departing of departures this week, up 9.6% from the 163,700 tons that departed last week. Especially insights into demand expectations from major oil companies for 2021 is important for digesting the macro situation. The decision went a step further than a 2013 ruling by a lower court, saying that Shell’s Nigerian subsidiary was responsible for multiple cases of oil pollution.
It is also part of a broader retreat by major oil companies from the ageing basin in recent years.
IndusInd Bank and Indian Oil Corporation are among the top gainers today.

United States

Citron Research was short squeezed by Wall Street Bets and Nokia stock NOK, Blackberry stock BB, as well as AMC stock was short squeezed and went to the moon. The whole, huge financial system is built around Wall Street banks that prize themselves on their ability to price risk accurately and make money out of market dislocations. Yesterday Fed Reserve Governor Powell said they are going to leave interest rates as is and that they have no intention of raising rates any time soon.
US stock futures are trading lower today, indicating a negative opening for Wall Street. Bellwether S&P 500 futures point firmly lower ahead of the opening bell on Wall Street, suggesting that yesterday’s rebound following Wednesday’s bloodletting may give way to renewed liquidation. The Fed has created a craze in equities, as they are directly targeting financial conditions, and installed a belief that equities only go one way. “So good luck to the Fed explaining to the market when it wants to trim bond buying that its stance with rates at zero is still loose.
less The Fed once again met expectations by not changing rates and not changing its asset purchase program (QE). While I think your trading style is crazy and reckless, I salute you for the Wall Street Reform it could very well bring. Looking ahead, the US PCE inflation gauge – the Fed’s favored price growth measure – headlines a relatively staid economic data docket.


“The ECB isn’t doneA little ambiguity is a useful thing for a central bank, a point made often and indirectly by the master of obfuscation, Alan Greenspan. The ECB’s policy makers were busy building a little more of it into their outlook this week, agreeing to stress that rate cuts are still on the table. Global Headlines Under pressure | The European Union s very public difficulty in securing Covid-19 vaccines has officials privately worried. Later today the EMA will host a press briefing on the EU recommendation of the AztraZeneca COVID-19 vaccine.
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. at +0.8% MoM and 1.0% YoY vs. +0.4%/+0.8% expected, and the “EU Harmonized” number was a hefty 1.4% MoM and 1.6% YoY vs. +0.3%/+0.5% expected, respectively. Main focus: Europe, Eurozone, Germany and ECB.