Open: New York Session | Forex, Metals, Oil, Agriculture October 21, 2020



That is consistent with rising international prices, particularly in top supplier Russia, where wheat prices hit record levels last week amid the weak currency and high export costs. MARKET NEWS Chicago corn futures rose for a third consecutive session and hit their highest in 14 months, as strong demand and Brazilian dry weather underpinned the market. It said farmers had completed wheat and barley harvest and collected 11.1 million tonnes of corn from 2.4 million hectares, or 44% of the sown area.
Most-active CBOT wheat hit $6.38-1/4 per bushel on Tuesday, the contract s highest since Dec. 24, 2014. Sugar prices at the Vashi wholesale market ruled mixed on Tuesday. The Bombay Sugar Merchants Association spot rates (₹/quintal): S-grade 3,226 –3,292 and M-grade 3,276 – 3,452.


The dollar value of foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded. The US dollar continues to leak lower and the dollar basket (DXY) is now below a noted short-term support level around 93.00. A stronger euro makes euro area exports pricier in international terms, thus reducing the probability of higher inflation. It is also possible that the 2020 PPP fair value figure will be modestly higher than 1.69, provided Canadian inflation continues to exceed euro area inflation.
Soon, we may see the digital Euro, the digital Dollar, or even the digital Yuan or Yen. Looking forward, it seems Europe and Japan may raise rates before the U.S., which could push the dollar into a prolonged bear market. In a global economic rebound, Canadian inflation is much more likely to surge than euro area inflation (judging by history). With politicians and central bankers desperately trying to paper over real economic losses with artificial stimulus, the outlook for the value of the U.S. dollar looks bleak.
London copper hovered near its 28-month high on expectations for fresh U.S. stimulus, with a weaker dollar and a stronger yuan also lending support. The euro is not viewed as a safe haven, and in contrast to Canada, the euro area is in fact a net-importer of crude oil products.


Domestic gold prices edged higher today, extending gains to the third day on signs that US lawmakers could agree on a new stimulus package before the November 3 election. Gold and silver prices edged higher despite US 10-year Treasuries yields soaring above 80 basis points for the first time since June. The unbacked gold receipts do not have any backup of proper money, which is gold. Also, note that honest money is obtained by selling some useful goods for it: the potato farmer has obtained one ounce of gold by selling ten potatoes for it.
The motor vehicle industry already consumes over 36 million ounces of silver per year – and that number will surely grow as global demand picks back up. But as demand continues to grow, the solar industry could soon run into a serious supply problem in critical metals including silver. Meanwhile, investment demand for silver bullion has been surging in recent months at the same time as mining supply is contracting due to adverse economic and political (lockdown) conditions.
By means of the unbacked gold receipts, goods are diverted from wealth generators to the holders of the unbacked receipts. What we have here is an exchange of ten potatoes for a pair of shoes with the help of money, in this case, the ounce of gold. In contrast, employing receipts that are not backed by gold in an exchange sets in motion an exchange of nothing for something.


Oil prices are important for CAD, since the energy industry has historically contributed around 10% to Canadian GDP; Canada remains one of the world’s key net-exporters of crude oil. Oil traders are also eyeing Wednesday’s EIA inventory reports, expecting a 1.02 million barrels fall in US crude oil stockpiles. Oil services firms must maintain liquidity to help sustain themselves amid a downturn in oil markets and uncertain economy. For the week ending October 9th, the rig count rose slightly week over week, yet completion activity could face headwinds at current oil prices.
Oil services firms have been cutting costs amid demand destruction for oil.
The company has heavy light crude oil and significant natural gas production. According to a US oil and gas agency, commercial crude stocks in the country rose by 584,000 bbl in the week ending the 16th of October. It is worth noting, however, that falling crude inventories should not mask a weakening demand outlook, which remains a key drag to oil prices. US crude oil imports have also fallen by nearly half a million barrels a day from the previous week.
However, while crude oil prices are still about a third lower on the year, a rebound from the lows has helped to close much of this gap.

United States

But if President Trump wins reelection, less fiscal aid would result in higher state and local taxes, and that should support the market as well. After a modestly firm handover from the US, Asian stocks moved higher and European bourses are seeing a mildly positive start amid renewed hopes for additional US fiscal stimulus. In the week ahead, we will of course need to follow closely any developments in the Brexit negotiations as well as any developments in the US regarding fiscal stimulus.
While the US market is trading the reflation narrative, the EUR market has been driven by Covid, lockdown fears and slowing economy. Since the Fed intervened in March, investor sentiment has gotten run back up to extremes despite the economy remaining amid a deep recession. Market participants sold the US currency as stimulus talks showed only slight progress in the US. With just two weeks until the U.S. presidential election, President Donald Trump also signalled a willingness to go along with more than $2.2 trillion in new COVID-19 relief.
Senate Majority Leader Mitch McConnell warned the Trump administration not to agree to anything like Pelosi’s proposal ahead of the election. A Biden administration is expected to embrace a more aggressive role for the CFPB, which in many ways has grown less forceful during President Trump’s time in office. “Market sentiments are hinged on to the US fiscal stimulus negotiations.


Since that by definition hurts RMB liquidity given China’s monetary pyramid, it really wasn’t surprising to see the PBOC announce an RRR cut for next year.


With only 10 weeks to go until a new trading arrangement must be in place, EU Chief Negotiator Michel Barnier said a deal is still within reach. Pound jumps as EU says Brexit trade deal still ‘within reach. Five Things Follow Us Get the newsletter Still talking on stimulus, the bond market is saying something, and Brexit deal optimism. Talks are expected to resume this week, as the EU is hoping for “intensive” discussions until a “fair deal” is reached. Much economic activity including UK-EU trade is likely to remain well below normal in this environment.
He lamented that the EU refused to give the UK the same trade terms as Canada, and stated that the UK would now be preparing for a “no-deal” Brexit. Formal discussions are expected to resume in the coming days, with EU officials expecting a deal to be struck by mid-November. If the U.K. leaves without a deal, however, then costs will be imposed on trading with the EU. At the end of the year, the U.K. will leave the EU, either with or without a trade treaty.
The veteran French statesman added that the EU is ready for a deal, but not at any cost, and that time is running out.