Open: New York Session | Forex, Metals, Oil, Agriculture July 21, 2021



Income gains and urbanisation are likely to drive per capita consumption of sugar, especially in Asia where the per capita availability is relatively low. While Brazil’s sugar production is projected to increase to 41.0 ml t, production in India is forecast to reach 35.6 ml t by 2030. The Indian sugar sector deserves end-to-end reforms so as to become globally competitive in the true sense of the term. For the next 10 years, Brazil will continue to remain the leading sugar exporter, followed by Thailand and India.
In the context of India’s sugar sector, there are some critical issues that deserve attention. These include water-intensity of crop, disposal of surplus sugar and export subsidy. However, the intense political interest in the sugar sector is well-known. Higher consumption will be triggered by expanding demand for sugar-rich confectionery products and soft drinks.


less Gold prices traded modestly lower during Wednesday’s APAC session amid a stronger US Dollar and higher yields. So, it seems the street is less inclined to chase the dollar further. The Swiss franc, the euro and the British pound fell 0.1%, 0.2% and 0.2% respectively against the U.S. dollar. Most of the major currencies are trading slightly heavier against the US dollar. The Scandis and New Zealand dollar are the most resilient today. Thus, it can be assumed that the reasons for the collapse of the British Pound should be sought in the UK.


Physical investment demand for silver this year is expected to be 26 per cent higher than last year at 252.8 moz. Price forecastsThe Silver Institute has forecast silver prices to average at $27.30 an ounce against $20.55 last year. US multinational investment bank JP Morgan has forecast silver to average at $26.5, while another Bank of America sees the metal averaging at $29.28 an ounce. Bank of America, in its note for commodity investors, said that it favoured silver over gold as an investment strategy due to this reason.
Real yields and gold prices historically exhibited a negative relationship, as rising yields mean that the opportunity cost of holding the non-interest-bearing metal is higher. “Unprecedented investor interest” in early February saw silver topping $30 a tonne before finding its levels. Gold is heavy, approaching $1800 after being turned back from $1825 yesterday (GLD).


Even last year, global LNG volumes were flat, contrasting with crude oil where global demand was down 7%. Global prices have been rising, even recently when oil prices have weakened. less Crude oil fell sharply on Monday, hit by the long-awaited confirmation of increased production from OPEC and growing concerns about the Delta COVID variant. Oil stocks were also down sharply as U.S. crude futures tumbled 7.5% to $66.42. Traders fear that new travel restrictions will be put in place, and that will hurt oil demand.
Although oil garners most attention, natural gas is at least as important to North American midstream, energy infrastructure. That also hit the oil market. US10Y yields also up 3bps to 1.22%, and oil recovered 1.5%. This has improved the economics for exports of US Liquified Natural Gas (LNG), and volumes continue to grow. The US saw the biggest growth in LNG exports, +1.5 Billion Cubic Feet per Day (BCF/D) to 6.5BN.

United States

That bolstered investors’ confidence that the Fed would let the economy run hot, creating sustained inflation that the central bank could later control with well-timed rate increases. But beyond the US risk-on trading rebound, global growth concerns should continue gurgling in the background, with the Delta variant looming large in investors’ minds. Adding to the rise were signals from Fed officials that they would hold off raising interest rates until after inflation climbed above their 2% target for a sustained period.
The initiative is part of a race on Wall Street, as large investment firms bankroll competing power projects amid a national pushto revamp electrical infrastructure. The recent rise in delta variant concerns will give the doves in Fed more reasons to argue for a longer accommodative monetary policy. The more exciting thing is UST 5s30s is steepening ahead of the Fed next week as the front-end market is repricing Fed hike expectations.
The US 10-year yield that briefly dipped below 1.13% yesterday is firm today, around 1.25%, while European bond yields are 1-2 bp firmer. 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. Deaths from drug overdoses in the US rose by 30% in the past year, a jump at least partially blamed on COVID lockdowns. We predict the flashy gym franchise might not be able to compete with other high-tech fitness companies like Planet Fitness Inc. (NYSE: PLNT) and Peloton Interactive Inc. (Nasdaq: PTON).


With enough vaccinations administered to cover about 50% of the European Union s population, it s time to live with the virus, as one French government minister put it. Still fresh in my memory is the story with Boris Johnson’s phrase that he “would rather see a mountain of corpses than introduce a lockdown”. European Union targets the end of fossil fuels with landmark climate proposals. As we have already understood, Brexit has long been of no interest to market participants.
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