Open: New York Session | Forex, Metals, Oil, Agriculture July 27, 2021

A member of the National Guard plays a trumpet during a flag rai

Agriculture

Coffee futures have climbed 30% in July and almost doubled over the past year, snapping a yearslong stretch of depressed prices that prompted many farmers to abandon their fields. Investors, meanwhile, are trying to gauge the ability of companies to pass on higher prices for materials like copper, PVC and coffee to consumers. less Share Coffee prices are heating up, and experts say an even bigger price hike could be coming. Major coffee companies may offer insights into how their business has been affected when Starbucks Corp. reports earnings after markets close Tuesday, followed by Switzerland’s Nestlé SA on Thursday.
WSJ explains the web of economic forces that help determine the cost of coffee.

Currencies

The stronger dollar, besides the basic customs duty at 25 per cent of CIF value and additional duties for imported RSS and TSR, has made imports more expensive. At the interbank foreign exchange, the domestic unit opened at 74.36 against the dollar, then inched higher to 74.35, registering a gain of 7 paise over its previous close. Thus, gold remains supported as a weaker dollar makes gold cheaper for foreign investors and boosts its demand. Global investors, many of whom believed the developer was too big to fail, bought up its high-yielding U.S. dollar bonds to earn fat returns.
The U.S. Dollar Index that gauges the greenback value versus the basket of six major currencies slipped to 92.53 level. Yesterday, the yellow metal dropped and remained on a red note despite weaker U.S. dollar and a slight dip in the U.S. Treasury Yields. The property developer, which was founded in 1996, is Asia’s second-largest issuer of U.S. dollar junk bonds after Japan’s SoftBank Group Corp. , according to Refinitiv.
It weighed on the U.S. dollar that limited the decline in yellow metal prices. The Swiss franc, the euro and the British pound fell 0.1%, 0.2% and 0.2% respectively against the U.S. dollar. If stocks continue to extend their gains, the U.S. Dollar and Japanese Yen will weaken.

Metals

Despite the effort to “squeeze” the bullion banks, silver has yet to push through the $30 barrier, and gold remains below the high put in nearly a year ago. In the meantime, there isn’t much use in trying to apply fundamental analysis to gold and silver paper markets. He is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the gold market. He writes a bi-weekly in-depth analysis for one of Germany´s largest gold and silver retailer the “pro aurum group”.
As well he is publishing his bi-weekly comprehensive for his numerous international readers focusing on Gold, Silver, Mining, commodities and cryptocurrencies. Gold prices for the latest contract on MCX are trading up by 0.1% at Rs 47,500 per 10 grams. Gold prices are trading down by 0.2% at Rs 47,428 per 10 grams. Meanwhile, silver prices are trading up by 0.1% at Rs 67,111 per kg. Gold price forecast remains mixed ahead of the Fed Monetary policy meeting.
Fero Labs, based in the U.S. and Germany, uses machine learning to improve energy efficiency at cement, steel and chemical companies.

Oil

Crude oil is trading just above the 72 handle after last week’s rebound as prices moderate in recent days. However, despite the sharp decline in oil consumption, oil remained on top with a 31.2% share of all energy consumption. Global oil benchmark Brent crude futures advanced 0.48 per cent to USD 74.86 per barrel. For example, as I will detail below, oil demand fell dramatically last year, but we already know that it has largely recovered in 2021. Meanwhile, Chinese oil imports fell to a multi-year low for the first half of the year in June.
Oil prices are 50% higher than where they began the year.
The remainder of global energy consumption came from coal (27.2%), natural gas (24.7%), hydropower (6.9%), renewables (5.7%), and nuclear power (4.3%). Small declines were also reported in coal, natural gas, and nuclear consumption, while renewables and hydropower recorded gains. About three-fourths of the decline came from oil, as the pandemic dramatically impacted the world’s transportation systems. During a six-year stretch at ConocoPhillips, Robert ran a team of engineers in Scotland working on oil and gas projects in the North Sea.

United States

Currently S&P futures are down 5 points, Dow Futures are down 66 points and Nasdaq 100 futures are up 7 points. Add to it, the US markets seemed nervous ahead of the Federal Reserve’s two-day monetary policy meeting that kicks off later in the day. Market participants are keeping an eye on the US where major companies report earnings and the Federal Reserve meets on policy this week. It’s because yellow metal was gaining support from a dovish European Central Bank, higher inflation, a large fiscal stimulus, and a currently accommodative Fed.
Image Source: Pixabay The Federal Reserve (FED) is expected to hold its monthly monetary policy meeting on Tuesday and Wednesday. It remained depressed for the 9th consecutive session and fell under the $1800 level on Monday as the investors turned cautious before the Fed meeting for July. Both ECB and Fed have stated that they will keep their monetary policy accommodative for the time. Dallas Fed manufacturing is also weaker, down 3.8pts in July to 27.3. less Investors are back to focusing on what the Fed does, rather than anything it says.
The Fed is expected to release a monthly policy statement and the remarks from Fed chair Jerome Powell on Wednesday. Fighting the Fed, or Washington, is usually a losing game—but betting against Beijing’s fast-moving, often opaque regulatory apparatus in Xi Jinping’s new era of centralized control is suicidal.

China

Beijing rolled back import quotas for this year’s second batch issuance, reportedly by as much as 35% from 2020. Crackdowns like the one on tutoring likely won’t extend to most other sectors, but Beijing has sent a clear message nonetheless.

Europe

Violating rules | China s environment ministry slammed the European Union s proposed carbon border tax, saying Monday that the policy unnecessarily creates climate-related trade friction. less When the ECB’s leadership presented their first QE to the assembled media on March 5, 2015, there was a lot of the usual corporate-speak. No, on this occasion, to the contrary, Mario Draghi, the ECB’s President, wanted to be perfectly clear in what he was saying.

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