Open: New York Session | Forex, Metals, Oil, Agriculture November 24, 2020

Agriculture

New York cocoa hit a nine-month high on Monday as funds continued to buy given tightness in nearby supplies in the physical and futures markets, where stocks are falling. The north of is already experiencing Harmattan winds, which sweep in dust from the Sahara, harming cocoa pods and drying out the soil. Ivory Coast, the world’s top cocoa producer, is now in the dry season, which runs from mid-November to March.

Currencies

Another important indicator of the world sensing a major change is the Euro instead of the US dollar being the most used currency for global payments in October. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. Once the ten stocks are determined, an investor invests an equal dollar amount in each of the ten stocks and holds them for the entire next year.
Copper prices impact the performance of Chilean stocks in U.S. dollar terms largely through their impact on the currency. We look at the implications of Yellen as Treasury Secretary, talk emerging markets and the US dollar, why gold corrected so sharply yesterday and much more. On Monday, the rupee had appreciated 5 paise to settle at more than two-week high of 74.11 against the US dollar. Looking back, it makes sense that gold is the best performing asset class (+22.8%) due to concerns over the value of the dollar.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.04 per cent to 92.47. BL Research BureauThe rupee (INR) ended marginally higher at 74.09 against the dollar (USD) on Monday. less Upbeat US data, stronger dollar – this , triggering a pullback in EUR/USD on Monday.

Metals

Well, interest rates have really benefited from gold, lower real interest rates, and we focus on the real part. Top metals consumer China last month said it would allow high-grade copper, aluminium and brass scrap that meets its new standards to enter without restrictions from Nov. 1. Gold miners are among the biggest emitters of greenhouse gases in the mining sector, although critics generally point to coal miners and iron ore miners. ECH Vs. Copper: Divergence Suggests ECH Upside Source: Bloomberg ECH has historically moved very closely in line with the price of copper, the country’s largest export by far.
Despite a two-thirds rally in the price of copper from the March low, the peso has barely advanced and its real effective exchange rate remains deeply undervalued. However, the close historical correlation between ECH and copper prices highlights the extent to which the metal impacts the index through the broader economy and currency. London copper futures rose as progress in a third COVID-19 vaccine related developments and strong U.S. factory data pointed to a positive outlook for industrial metals’ demand.
Nominal interest rates have come down, but because inflation is higher than that 0.9%, real rates are negative, and that’s a dream scenario for gold. Bitcoin rally, gold slumpThe rapid rise of Bitcoin continued this morning, passing $19,000 for the first time since 2017. Second, the three comparable corrections in gold stocks (2002, 2006, 2009) all went below their 200-day moving average (blue), and two bottomed at the 400-day exponential moving average (red).

Oil

Access the crude oil report here (link to be pasted on Eikon search) You can access the full report here . Brent crude futures, the global oil benchmark, rose 0.91 per cent to USD 46.48 per barrel. Biden has said he supports a ban on new gas and oil permits including fracking on federal lands. The announcement follows SOMO’s plan to launch a third crude oil export grade called Basra Medium in January, by splitting the existing Basra Light production into two grades.
The deal reflects rising interest in Guyana, a small South American country of 750,000 whose oil discoveries are set to transform an economy dependent on agriculture and mining. S&P 500 futures pointed to more green at the open, the 10-year Treasury yield was at 0.862% and oil was at $43.50 a barrel. Also supporting oil and wider financial markets, U.S. President Donald Trump on Monday allowed officials to proceed with a transition to Joe Biden’s administration. (Source: Unitil 2019 Annual Report) Natural gas may represent less than half of the company’s operating revenue but it has a much larger impact on the company’s earnings.
Natural gas sales margins were $122.2 million in 2019, or 57% of Unitil’s total sales margins.
In Europe the Stoxx 600 Index gained 0.5% by 5:50 a.m. with oil stocks by far the best performers.

United States

A smoother transition reduces the already low risk that Trump clings to power and also allows Biden and his team to have better chances of boosting the economy. The surge in risk assets suggests the market is expecting booming real growth to be the catalyst for the shift toward a more hawkish Fed. Later, however, equities rushed higher in very late hours after Trump instructed a key agency to prepare for a presidential transition.. In a year where the FAANG+Microsoft (NASDAQ:MSFT) basket of stocks are a big contributor to index returns, the Dow Dogs hold none of the FAANG+M companies.
higher net interest income and a higher net interest margin), or even better, the Fed allowing banks to start repurchasing shares again. In the US, the Russell 1000 Value Index traded at a 57% discount to its growth counterpart (Display, right) – also close to historical low levels. In late July (brown line) the market was flirting with the idea of negative rates, as shown by the fed funds futures curve.
Weighting the US, eurozone, UK and Japan PMIs together, for example, creates a “G4 developed world” series of indicators, covering output, new orders, employment, inflation, etc. The combination of the election and Pfizer’s vaccine news resulted in the fed funds curve jumping higher (cyan and red lines). The Fed will continue to supply liquidity, which will help the market ignore the reality of valuations, technical deviations, and excessive bullishness for now.

China

Beijing-based China Online was founded to develop online course curricula to teach the English language to Chinese and Philippine students. President Xi Jinping has pledged an estimated USD$1.4 trillion through 2025 for the research and development of key technologies.

Europe

Although hospitality sectors saw business collapse amid the new virus containment measures, some respite came in the form of a temporary boost to manufacturing from pre-Brexit stockpiling. Although just over one-in-four manufacturers reported higher exports in November, almost half of these firms attributed the improvement to pre-Brexit stockpiling by customers. But Mazari didn’t take well to the suggested idea and instead accused Macron of “treating his country’s Muslim population like Jews in Nazi Germany”.
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. French President Emmanuel Macron will address the nation tonight to set out his plans for a gradual easing of coronavirus restrictions. Goldman Sachs to start Paris trading venue as Brexit approaches. Main focus: Europe, Eurozone, Germany and ECB.

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