Open: New York Session | Forex, Metals, Oil, Agriculture July 22, 2020


U.S. stock futures fell, as did soybean futures (China is a big buyer and the U.S. a big seller).The question now is how Beijing responds. ANALYSIS-Want to make profits from coffee in China? Pakistan’s government permitted private sector wheat imports in June to cool domestic wheat and flour prices. MARKET NEWS Chicago soybeans futures bounced back, rising for six out of seven sessions while corn gained ground on strong Chinese demand. Morale steady on expectation of hike in minimum selling price Continuous selling by mills and sufficient supply kept sugar prices steady at all levels for the fifth consecutive day.


The dollar index slipped, while gold prices rose. The dollar found support near its recent lows against the yen around JPY106.65 yesterday, and Tokyo refrained from selling it. However, the rupee price of the precious metal is at a record high because of the weakening of rupee to the dollar over the years. Copper prices rose as a weaker U.S. dollar made the metal more attractive, while the European Union’s massive stimulus program lifted market sentiment. The euro is the second largest reserve currency behind the dollar. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. Silver surged to 7-year highs as the haven-associated US Dollar sank to its lowest levels since early January.


Favorably, the surging price of gold and silver can mitigate the weaker production results for the year. Take the Donlin Mine, for example, which is a development mine with a 50/50 joint venture between Barrick Gold (NYSE:GOLD) and NovaGold (NYSEMKT:NG). ($213.7M + $90.3M) / (200,263 Gold ounces produced) = $1,518 per ounce Source: Kinross Gold FY2019 annual report Source: Created by the author using data from company financial reports. Gold in India tracks the international rate as India imports almost the whole of its gold requirement. In 2019, the mine produced 200 thousand ounces of gold, which was the largest production from an Alaskan gold mine in 2019. Kinross Gold became the owner of the mine when Kinross merged with Amax Gold in 1998. Gold produced in Alaska is only second to gold produced in Nevada, which leads all other states by a large margin.


An industry body estimated that the US crude oil inventories could climb by 7.5 million bbl against a Reuters poll forecast of a draw of 2.1 million bbl. Oil (OIL) is also pulling back after reaching a four-month high near $42.50 yesterday basis the September WTI contract. U.S. crude stockpiles rose by 7.5 million barrels in the week to July 17 to 531 million barrels, data from an industry body showed. Oil prices were down after an industry report showed that U.S. crude inventories rose sharply. The company said it produced 2.802 million barrels of oil equivalent per day (boepd) in the second quarter. As an energy exporter, Russia also greatly suffered in the last few months from the historically low prices for oil and natural gas. However, industry reports on US crude oil inventory and US President Trump s warning that coronavirus pandemic in the US could likely worsen, put brakes on the rise.

United States

A Trump supporter sits in the upper rows of the BOK Centre in Tulsa, Oklahoma ahead of a campaign rally. If the Trump administration follows through with its threats to block the video-sharing app, a long list of Chinese social media companies could be next. The US president wrote on Monday that “foreign countries and others” would print mail-in ballots to disrupt November’s election. President Donald Trump has presided over the first coronavirus briefing in around two months and changed his tone markedly. (One caveat: This possible stimulus package is not a fait accompli given that President Donald Trump has threatened to veto it if it doesn’t include a payroll tax cut.) Through last week’s high, the Nasdaq 100 index surged 63.5 percent, and the Russell 2000 small cap index jumped 59.1 percent through its high early June. In times like this, despite a massive and rising budget deficit for the US, I believe big government is likely to be good news for the stock market.


A spokesman in Beijing called the move an unprecedented escalation and said China will respond. Following a suspicious document fire that we chronicled yesterday, Washington has turned the tensions with Beijing up to ’11’ by ordering the immediate closure of the Chinese consulate. Beijing is fast becoming a liability for its tech companies. What Else Is Happening Xi Jinping called on companies to innovate more and stabilize employment to bolster the economy. Because even as Beijing pushes back it will want to avoid triggering an even bigger escalation. Beijing may offload about 10 million tonnes of rice in the first batch of sales, according to one of the sources who was briefed on the plan. Separately, President Xi Jinping urged Chinese companies to step up innovation and help stabilize employment.


The former trade secretary was sacked by Boris Johnson last year, but he has remained loyal to the prime minister and would be a popular choice among Tory backbenchers. Mr Seely conceded that the “lack of protection in the Scottish referendum and the lack of protection and care in the Brexit referendum were both wrong”. The new stimulus out of the EU is a sign that perhaps they’re building the infrastructure for a more sustained and powerful fiscal policy going forward. Despite admission that there’s no evidence of Russian interference in the Brexit vote, the new report is . Meanwhile the report calls for a fuller investigation into alleged Russian manipulation related to the Brexit vote. The Intelligence and Security Committee (ISC) has urged the government to investigate potential Russian interference in the 2016 EU referendum – a call immediately rejected by the government. The approval of the EU recovery fund, worth 750bn euros, set the ball rolling early doors in Europe with risk boosted and we never looked back.