Open: New York Session | Forex, Metals, Oil, Agriculture July 20, 2021

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Agriculture

Not only have global spring wheat weather problems grown but flooding rains in Germany and other parts of Europe threaten what was once a great wheat crop. The weather has been a major factor affecting coffee (JO), natural gas (UNG), corn (CORN), soybeans (SOYB), and wheat (WEAT) prices. The U.S. drought is really affecting the major spring wheat areas that also extend into Canada. less Commodity markets have seen some historical volatility lately with crude oil, cotton, and several others seeing massive profit-taking.
This video talks more about weather is affecting the grain market and coffee.

Currencies

Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.05 per cent to 92.84. The local unit opened weak at 74.93 a dollar and touched a low of 74.95 and high of 74.55 during the day. The US Dollar Index (DXY) pushed bids up to 92.88, above a four-day uptrend close to a three-month high with a daily gain of 0.06%.
Our system started with roughly equal dollar amounts of each, and then rounded them down to round lots, to reduce hedging costs. However, the US dollar’s strength and concerns over the Delta variant have recently turned to the proposal. However, a stronger US Dollar more than likely offset some strength. This is causing the dollar to strengthen above some major resistance. He is also Chairman of SchiffGold, his precious metals dealer, Euro Pacific Asset Management, and Euro Pacific Bank, his brokerage firm for international clients.
A financial professional for more than twenty years, he joined Euro Pacific in 1996 and served as its President until December 2010, when he became CEO.

Metals

Gold prices edged higher today in Indian markets, pushing prices to near a one-month high. In global markets, gold rates edged higher today as a rebound in Covid-19 cases across the world boosted the safe-haven appeal of the precious metal. Gold prices are trading up by 0.1% at Rs 48,109 per 10 grams. Gold prices are trading down by 0.2% at Rs 48,194 per 10 grams. Lower yields are normally a tailwind for gold prices. less One of the most useful intermediate-term indicators of the financial/economic landscape is the performance of industrial metals relative to gold as indicated by the GYX/gold ratio.
Lower bond yields reduce the opportunity cost of holding non-interest-bearing gold. Elsewhere, anti-fiat gold struggled to gain much upside momentum despite broad-based risk aversion. On MCX, gold futures were up 0.4% to Rs 48,278 per 10 grams. Gold was also supported by a dip in US bond yields.

Oil

Global oil benchmark Brent crude futures rose 0.22 per cent to USD 68.77 per barrel. Meanwhile, international oil benchmark Brent crude advanced 0.16 per cent to USD 68.73 per barrel. The rework to baseline levels that cuts were initially calculated from will allow the respective countries to release more oil into global markets while keeping a supply deficit intact. less Asian share markets are down today as growing fears of the spreading Delta variant would harm the global economic recovery sent riskier assets, including oil, skidding sharply.
However, the drop in prices on Monday was not the desired effect OPEC likely had in mind, leaving the possibility for a rollback should ailing prices persist. The longer these go on for, the bigger the hit to economic activity, which roughly translates to reduced oil consumption. Indeed, that OPEC decision was a monumental revision to its output deal.

United States

At UBS’s investment bank, deal advice for mergers and acquisitions and other corporate transactions pushed global banking revenue 68% higher, helping to offset a 14% decline in market-trading income. Nasdaq Futures are trading up by 82 points (up 0.6%) while Dow Futures are trading up by 121 points (up 0.4%). UBS said markets revenue would have been flat but it took an additional $87 million hit the quarter from the late March default by family office Archegos Capital Management.
Bonds rallied: US10y yields finished the US session 10bps lower at 1.19%, lowest since 11 February, after trading as low as 1.17% intraday.
US stock futures are trading higher today, indicating a positive opening for Wall Street. In addition to virus concerns, the DXY bulls appear to have recently benefited from the hiatus after the US Treasuries stabilized near their lowest point in February. Image Source: Zacks Investment Research Wall Street might continue to use the impressive second-quarter earnings season as a chance to keep selling. UBS helps the world’s rich manage their wealth and competes with Wall Street banks in investment banking.
In addition to the above risk factors, the performance of the US real estate market and a steady upward trend are critical for the new direction. Since a few months, one of the key developments in the US housing market has been the rebound of rent prices.

China

Beijing is unlikely to allow a disorderly unwinding of all the company’s massive debts—but that doesn’t mean all investors will be safe if things keep going south. The risk barometer stalled near an annual low as sellers anticipated new traces of the boring RBA stance and the inaction of PBOC. Ultimately, Evergrande’s fate rests with Beijing.

Europe

In the UK, the number of cases per day exceeded 50k, but Boris Johnson, nevertheless, announced the complete abolition of quarantine restrictions, including the mandatory wearing of a mask.

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