Open: New York Session | Forex, Metals, Oil, Agriculture September 15, 2020

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


Between July and August, Egypt bought 2.4 million tonnes of wheat from international suppliers compared with 1.72 million tonnes purchased during the same period last year. The U.S. is banning some hair products, apparel, cotton, and computer components from the country. The product, which won’t have sugar or calories, was conceived by Pepsi employees as part of an internal contest, and will be distributed in grocery stores by early 2021. MARKET NEWS Chicago soybean futures rose to trade near their highest in more than two years, with Chinese demand and concerns over U.S. production supporting prices.


The rupee strengthened by 15 paise to 73.33 against the US dollar in opening trade on Tuesday as weak American currency and positive domestic equities strengthened investor sentiment. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. At the interbank forex market, the domestic unit opened at 73.33 against the US dollar, registering a rise of 15 paise over its previous close.
SIVR is currently pressured by dollar strength, keeping the precious metals space under pressure. This is partly due to recent asset sales, but those assets were sold for pennies on the dollar compared to their purchase price. The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.18 per cent to 92.88. Therefore, investors would do well to continue embracing a cautious posture toward the dollar and maintain inflation hedges. In FX, a focus on the US dollar and especially the massive new surge in Chinese yuan strength.
Stocks are up, while the US Dollar is moving lower across the board. The rupee (INR) yesterday, settled on a flat note at 73.48 despite witnessing higher volatility against the dollar (USD).


At this producing silver mine, the company is evaluating modifications to its roasting circuit to reprocess tailings, which could add 1.5 million silver ounces per year. The notable wave of ETF selling in the silver market could reflect a negative swing in sentiment, which could have negative implications for silver prices in the short term. Given the positive macro backdrop for gold and silver, we expect an eventual increase in net long speculative positions in COMEX silver in the quarters ahead.
Even with the recent volatility in prices, gold and silver remain among the best-performing commodities this year to combat the fallout from the coronavirus pandemic. That has often been true for gold, as well, since gold bull market cycles typically lead to higher production among the leading mining companies. I’ve estimated that First Majestic will earn close to $150 million from the stream over the life-of-mine at $20/oz silver and close to $250 million at $30/oz silver.
: A return to speculative buying interest for COMEX silver would exert significant upward pressure on the COMEX silver price higher, thereby exerting concurrent upward pressure on SIVR. The mine produced 18.5 million silver ounces and 39,000 gold ounces from 2006-19. Silver prices have been in consolidation mode since August 10, inducing the speculative community not to rush to assert more upside exposure to COMEX silver. In particular, the company has several promising development projects, and past producing mines, that it can bring back to production relatively quickly to take advantage of higher silver prices.


MARKETS TODAY OIL: Oil prices edged slightly higher, but forecasts of a slower than expected recovery in global fuel demand due to the coronavirus pandemic weighed. Meanwhile, OPEC expects world oil demand to fall by 9.46 million bpd this year, more than the 9.06 million bpd decline it forecast a month ago. Who wants oil?The International Energy Agency added its voice to warnings over future demand for oil in its monthly report this morning. US crude oil stocks likely increased by 2.0 million bbl through the week ended 11th Sep according to a Reuters poll of analysts.
Trafigura Group, the world’s second-largest oil trader, warned that the oil market is about to go back into surplus. Spot West Texas Intermediate (WTI) crude oil exited the month at $42.61 per barrel, up 5.8% over the period and 22.7% lower year over year. OPEC and allies, a group known as OPEC+, have been reducing production since May to support oil prices after global demand plunged in the wake of the coronavirus pandemic.
SA (Saudi Arabia) cut prices to China and Asia last week, sending oil prices tumbling to their lowest since July.
Brent crude futures, the global oil benchmark, fell 0.08 per cent to USD 39.58 per barrel. To access the Middle East crude oil report, click here (link to be pasted on Eikon search) You can access the full report here.

United States

Coronavirus cases in the US have popped back above the 30k/day market this week as the world rockets toward the next major milestone number: 30 million. Overall, on Tuesday, stocks are higher and currencies bid as well, though we don’t expect all that much volatility, with market participants positioning into tomorrow’s anticipated Fed event risk. U.S. futures are pointing to another green session (Dow +0.6%, S&P 500 +0.7%, Nasdaq +0.9%) after the market kicked off the week with a broad-based rally.
Futures for Wall Street s major indexes were higher, ahead of the U.S. Federal Reserve s two-day meeting, as upbeat data from China revived optimism around an economic rebound. The deal still faces a substantial hurdle in terms of potential opposition from President Trump, given that the deal may leave the firm under Chinese ownership. Wall Street saw a wild swing last week with the U.S. stocks posting the second consecutive weekly loss. US stock futures are trading higher today, indicating a positive start for Wall Street indices.
Nasdaq Futures are trading up by 47 points (up 0.4%), while Dow Jones Industrial Average Futures are trading up by 79 points (up 0.3%). Nasdaq Futures are trading up by 101 points (up 0.9%), while Dow Jones Industrial Average Futures are trading up by 173 points (up 0.6%). Many market participants are starting to wonder whether the Fed will allow volatility to rise and, thus, create the framework for a deeper drop below 11,000 points.


President Xi Jinping pushed back against EU “lecturing” about human rights in a call about European investment with the region’s leaders yesterday. The fancy footwork was also on display during a call yesterday between China s Xi Jinping and European Union leaders, including Angela Merkel. While this is a step in the direction of more balanced growth, Beijing’s policies still seem to favor supply over demand.


Prime Minister Boris Johnson’s controversial Internal Markets bill – which he signed only last year – passed the first vote with a majority of 77 MPs. FeaturesChristine Lagarde made global warming a defining feature of her time at the IMF, warning that humanity would be “roasted, toasted, fried and grilled” if it failed to act. Sanctions at the EU level would also have to be sufficiently substantiated by evidence and be deemed a proportional response to avoid being thrown out by EU courts.
China and the EU paid lip service to ideas that the seven-year-old investment pact negotiations can be successfully concluded this year. MARS now sees the average EU grain maize yield at 7.83 tonnes per hectare (t/ha), down from its forecast last month of 8.01 t/ha, it said in a report. It all started with the U.K. being ready to break international law for the Brexit divorce, sending a negative message across financial markets. In a major turnaround, German Chancellor Angela Merkel said this week of the possibility of halting the pipeline: “I have not yet formed a final judgment on this.”
EURGBP gains were modest as investors awaited a vote in the UK parliament on Prime Minister Boris Johnson’s new Brexit proposals, which the European Union has harshly criticized. Vote on the Brexit bill, which could violate all EU agreements, is also in the spotlight. The legislation raises the chances of a hard Brexit, that may have an adverse impact on the eurozone.