Open: New York Session | Forex, Metals, Oil, Agriculture July 15, 2021

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Agriculture

Any significant future increase can come only from policy intervention relating to crop diversification from rice and wheat.

Currencies

Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. At the interbank foreign exchange, the domestic unit opened at 74.48 against the dollar, then inched higher to 74.47, registering a gain of 12 paise over its previous close. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading unchanged at 92.40.
That is when taper talk fears, spurred by rising prices, pushed the US Dollar and Treasury yields higher. He is also Chairman of SchiffGold, his precious metals dealer, Euro Pacific Asset Management, and Euro Pacific Bank, his brokerage firm for international clients. less The Australian Dollar (FXA) is trading near a very important resistance level. The reason for this could be the weakening of market sentiment and the recovery of the US Dollar. The Swiss franc, the euro and the British pound gained 0.1% against the U.S. dollar.
less The euro rallied significantly during trading session on Wednesday to recover most of the losses it incurred on Tuesday. On Wednesday, the rupee had settled at 74.59 against the US dollar.

Metals

less Gold prices have been on the up this month as the yellow metal’s fundamental outlook improved, as markets capitulated further to a transitory view on inflation. Gold prices today edged lower in Indian markets after a sharp gain in the previous session. Gold prices for the latest contract on MCX are trading up by 0.1% at Rs 48,335 per 10 grams. On MCX, gold futures were down 0.1% to Rs 48,265 per 10 grams after posting a nearly 1% gain in the previous session.
Gold prices are trading down by 0.1% at Rs 48,275 per 10 grams. Gold prices are trading up by 0.4% at Rs 48,498 per 10 grams. In global markets, gold rates were flat at US$ 1,824.8 per ounce after hitting a four-month high of US$ 1,829.6 in the previous session. Gold is attempting to break above the key 200-day Simple Moving Average (SMA), which would likely brighten its technical posture and pave the way for more upside. Here is also a comparison of the gold stocks, which really haven’t moved, to the slow rise in gold.
Gold retakes 200 day moving average after Powell reiterates transitory inflation verse.

Oil

Forex traders said foreign fund outflows and firm crude oil prices could weigh on investor sentiment and cap the appreciation of the local unit. A possible deal in OPEC saw a sharp drop in crude oil prices, and there is some follow-through selling today. Global oil benchmark Brent crude futures declined 0.76 per cent to $74.19 per barrel. Oil & gas and energy stocks, on the other hand, witnessed selling pressure. Oil & gas stocks, on the other hand, are trading in the red.
No signs that inflation is transitory in the oil market. The one thing most investors don’t want them to do with it is pump more crude. The Oklahoma-based oil-and-gas producer plans to use the money in part to pay off other debts.

United States

Inflation Expectations Are No Longer Well Anchored (posted this morning before Powell’s speech) I made this mocking statement” “The only thing that’s clearly well anchored is Fed groupthink silliness.” less Well…we did say the Fed Chair would be out in full force on Wednesday, doing everything in his power to talk down the on-fire inflation data. less Fed forced to admit that inflation will be higher and last longer than they predicted. Australia’s jobs data were also better than expected, and the 10-year Aussie bond yield fell five basis points and is again at a discount to the US.
Nasdaq Futures are trading up by 19 points (up 0.1%) while Dow Futures are trading down by 100 points (down 0.3%).
In a biennial statement, Fed Chairman Jerome Powell tried to convince markets that the Federal Reserve will make many announcements before adjusting the monetary policy. But the Fed keeps it at bay -for now- even as doing so in a way (especially with inflation we have) aggravates risk. Fed Chair Powell did not break new ground yesterday and insisted that the bar of “significant further progress” has not been met to begin reducing its bond purchases.
Still, the details of the US CPI release suggest inflation is getting clingy more tenacious. The Fed is trying to delay the inevitable ‘snugging-up’, with even former Treasury Secretary Mnuchin and Larry Fink also criticizing this policy.

Europe

Next week’s meeting suddenly has become very interesting as it should bring more clarity around how the ECB wants to implement its new strategy. Pexels Until a week ago, next week’s ECB meeting was set to be a non-event; an intermediate meeting to bridge the time until the September 9, meeting. However, with the release of the ECB’s strategy review last week, any ECB watcher hoping for early summer vacation had to change their plans. Thus, what the strategy review lacked in ambition on the inflation front, Lagarde must now push on forward guidance to build its credibility.
less Last week, the ECB unanimously approved an updated monetary policy strategy. Next week, Lagarde and her colleagues will decide if the changes to the strategy will prompt changes to the policies. If the latter is the case, the ECB’s own inflation projection of 1.4% in 2023 would forbid any tapering in the coming months. Forest wars are looming Traditionally seen as an add-on to climate plans, trees take center stage in the EU s proposal.
Finally, Lagarde is now done seeking unanimous backing, saying that she neither has the expectation nor the illusion that decisions will be unanimous. 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.

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