Open: New York Session | Forex, Metals, Oil, Agriculture October 14, 2020

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

Agriculture

The U.S. soybean crop was 61% harvested, the USDA said, well ahead of the five-year average of 42% and slightly ahead of the average analyst estimate of 59%. MARKET NEWS Chicago soybean futures slid, weighed down by a rapid pace of U.S. harvest, although losses were limited by lack of rains in top producer Brazil. Coffee may revisit its September high while cocoa its July low.

Currencies

The euro has strengthened significantly against the U.S. dollar this year, owing to significant monetary interventions that have seen USD rates collapse to the zero lower bound. The dollar index edged up and gold gained on demand for the safe-haven assets as investors contemplated a murky outlook in the near term. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action.
The euro tends to strengthen against other currencies when it is also strengthening against the U.S. dollar. The euro has always been a reserve currency (second only to the U.S. dollar). He is also Chairman of SchiffGold, his precious metals dealer, Euro Pacific Asset Management, and Euro Pacific Bank, his brokerage firm for international clients. This was a mechanical move owing to capital repatriation as short-EUR carry trades were unwound, while U.S. interest rate cuts sedimented the euro’s stronger position.
A stronger USD Dollar may exert downward pressure over commodity prices. Both EUR and NZD have benefited from lower oil prices too, since both the euro area and New Zealand are net importers of crude oil products. When USD is weakening, U.S. risk assets become more attractive in international FX terms, and thus a stronger euro is usually associated with risk-on activity.

Metals

Copper prices rose in London, as the threat of supply disruptions in top producer Chile and hopes for stronger consumption by leading consumer China supported prices. Companies that scored low in this category include Berkshire Hathaway Inc., Liberty Media Corp., Southern Copper Corp. and Dillard s Inc., he said. Gold may drop more, driven by a wave four Base metals may keep their bullish momentum awhile, but with limited upside. MARKET NEWS Gold firmed as uncertainties over a global economic recovery and the U.S. presidential election prompted investors to exploit the previous session’s sharp pullback to buy bullion.
Hydro supplies aluminium, which is highly energy intensive to make, to a range of industries including the construction and automotive industry, among others. “Our commercial team has recently received deferment requests,” he told a briefing after the miner’s annual general meeting, adding, “It would be concerning if the rumours were true.”
Gold prices are trading up by 0.2% at Rs 50,345 per 10 grams. Moving on to stock-specific news… Tata Steel Long Products was among the top buzzing stocks today. In his writing and research, Sumner specializes in monetary policy, the role of the international gold market in the Great Depression, and the history of macroeconomic thought. Gold gained on demand for the safe-haven asset as investors contemplated a murky outlook in the near term.

Oil

Researchers said that the drop in oil prices stalled growth in associated gas coming from previously robust oil production. See IEA sees oil demand suffering long-lasting blow: Long-term growth in oil demand will be tamed by the switch to more efficient or electric vehicles, the IEA forecast. In its monthly oil market report, the IEA said global oil supply in September was 9% below the pre-pandemic average of 2019. Kazakhstan pledged to cut oil output by 390,000 barrels per day in May and June to 1.319 million barrels per day under the OPEC+ deal agreed in April.
This also applies to risk-on commodities like oil, although oil is known to have a life of its own, with its own unique sources of volatility (including geopolitics). US shale oil output is likely to decline by 123,000 bpd in November to about 7.69 million bpd according to latest forecasts by the US EIA. Source: DailyFX, Bloomberg Across the Pacific Ocean, Chinese oil imports rose 2.1% to 48.48 million barrels in September from 47.48 million barrels in August.
Meanwhile, U.S. crude oil inventories were seen falling by 3.4 million barrels in the week to October 9, according to a preliminary poll conducted by Reuters.
I have worked in the areas of oil refining, natural gas production, synthetic fuels, ethanol production, butanol production, and various biomass to energy projects. The amount of oil in expensive offshore floating storage fell sharply below its level in May, at the nadir of the global crude crisis, the agency said.

United States

Asian stock markets ended on a mixed note, as global markets await further clues of the US fiscal stimulus deadlock and coronavirus vaccine trial halts. US stock futures are trading higher today, indicating a positive opening for Wall Street indices. The US stock market overall, based on the SPDR S&P 500 Trust ETF (SPY), is ahead 55.3% since the coronavirus crash low. BEFORE THE BELL Wall Street futures were little changed on doubts about more fiscal stimulus, and ahead of the next batch of quarterly earnings.
Miraculously, QE saved the day, and the US stock market had the longest recovery on record, while the economy enjoyed modest growth rather than a recession. Wall Street futures were little changed on doubts about more fiscal stimulus, and ahead of the next batch of quarterly earnings. The US itself has a packed corporate calendar this week, and yesterday saw earnings reports from banking giants JPMorgan and Citigroup, plus Appleā€™s launch event for the new iPhone.
A string of upbeat US corporate earnings reports released on Tuesday failed to boost confidence on Wall Street, which saw major indices retracing from their recent highs. Recent Fed policy, our internal analysis and the economic environment all suggest that cash returns going forward will follow a similar pattern as we continue this recovery. Earnings The big surprise from the start of Wall Street earnings season yesterday was the much smaller than expected level of loan-loss provisions.

China

Take, for instance, a South China Morning Post (SCMP) report, citing a Beijing think tank that said at least 60 US warplanes conducted reconnaissance flights near China in September. Concern over escalating tensions between Washington and Beijing have been center stage in 2020.

Europe

Johnson will make a decision on whether to end talks after EU leaders meet tomorrow and Friday, an official says. A person close to the negotiations said that Johnson will not make a decision on his next move until after an EU leaders summit ends on Friday. The decision follows a similar WTO ruling from last year that allowed the U.S. to impose tariffs on $7.5B in EU goods over state support for Airbus (OTCPK:EADSY). We have been observing the EU import trends for quite some time and filing the dumping complaint is a big step for us, Wendt said by phone.
Both the U.K. and EU don’t appear to be making any headway as the clock ticks down to Boris Johnson’s deadline for abandoning negotiations over their future trade relationship. Undoing deals | Boris Johnson s government is drawing up plans for a radical new law that would give ministers power to unravel foreign investments in British companies. The World Trade Organization has awarded the EU the right to impose tariffs on about $4B in American goods in retaliation for subsidies granted to Boeing (NYSE:BA).
The EU probe of optical-fiber cables imported from China stems from the first-ever dumping complaint by Europacable, an association that represents European producers including Prysmian, Nexans and Leoni. The EU official journal said on Tuesday that the duties, ranging from 30.4 to 48.0%, would apply from Wednesday. Brexit heats up | The U.K. will continue efforts to reach an agreement with the EU past an Oct. 15 deadline.

0