Open: New York Session | Forex, Metals, Oil, Agriculture September 17, 2020



MARKET NEWS Chicago soybean futures were little changed, after hitting their highest since June 2018 earlier in the session on the back of increased demand from top importer China. ICE raw sugar futures extended their recovery on Wednesday, steadying above the 12-cent mark as the dollar slid further and oil prices recovered. On Wednesday, most-active November soybeans finished at $10.11-1/4 per bushel, up 15% since the Aug. 12 report from the U.S. government.
Sugar prices ruled steady on Thursday. The Bombay Sugar Merchants Association spot rates (₹/quintal): S-grade 3,292 – 3,352 and M-grade 3,386 –3,502 .


On a valuation basis, Dollar Tree looks cheaper than Dollar General, but if we factor in the great job Dollar General has done controlling costs it may be warranted. Dollar Tree has a total of 15,479 stores under the two brands of Dollar Tree and Family Dollar. The amount of Family dollar stores has decreased by 1% over the past five years to improve the store footprint, but Dollar Tree stores have grown 26%. Also, the dollar looks positive today as indicated by the dollar index.
Dollar Tree is just like Dollar General in that each company is a leader of operating variety stores. Dollar indexThe dollar index, that closed flat yesterday, has been rallying today. In my opinion, I think waiting for a dip in Dollar General is a better option than going for Dollar Tree at the current price. Overall, Dollar Tree is lacking in what Dollar General has; a solid plan that has lowered costs long term. When I looked into Dollar General, what I found was that the COVID-19 pandemic had a positive effect and I expect the same thing from Dollar Tree.
But Dollar Tree lacks the cost discipline that Dollar General has shown.


When looking at the net present value of similar gold projects held in Nevada and Idaho, KORE also appears to be a value opportunity among junior gold developers. With a market cap around $110 million and a total resource inventory of 3.9 million ounces gold, the company is being valued at a reasonable $29 per ounce. less A discussion about how the gold ETFs, GDX and GDXJ have fairs over the past month compared to the smaller gold juniors. Hindalco Industries, Aditya Birla group company, has signed an agreement to procure copper concentrate from state-owned Hindustan Copper Ltd.Currently, Hindalco buys copper concentrate from global mining companies.
Results of a new PEA show a post-tax $263 million NPV and 40% IRR using a $1,600 per ounce gold price. Imperial is a larger deposit than Long Valley and is projected to produce 146,000 ounces of gold per year over 8.5 years. They have taken advantage of a gold bull market and seen their share price rise 300% in one year.
Over the last three weeks, gold is trading in a narrow range since hitting record highs of Rs 56,200 last month. Long Valley will be good for optionality and additional upside if gold prices continue to be high in the coming years. Under this MoU, Hindalco will use about 60 per cent of copper concentrate produced by Hindustan Copper.


US crude oil stocks (C-STK-T-EIA) fell by 4.4 million bbl during the week to Sep 11, taking the total inventory down to 496 million bbl, the lowest since April. It s a big deal for an oil major to call the top on oil demand. One of the biggest international oil companies has concluded that oil consumption will peak this decade. less Crude oil prices have traded higher across the week, recouping some of the losses suffered over the prior week. Elsewhere, the data showed that US crude oil imports averaged 5 million barrels over the week.
Looking back across the last four weeks, US crude oil imports have averaged 5.3 million barrels per day.
Malaysian palm oil futures climbed 3% to hit an eight-month high, tracking gains in Dalian oils and on increased demand from China ahead of a key festival week. No, BP says that even if energy policy keeps evolving at pretty much the pace it is today, oil demand will still start declining. In this scenario, if cross-border investment slows, demand for growth-anchored assets like crude oil may fall. Similar to many industries, the economic impacts from Covid-19 has changed the landscape with oil demand plunging by record amounts.

United States

Federal Reserve keeps interest rates unchanged.Fed pledges to keep rates low until inflation exceeds 2%.Why U.S. consumer spending may slow if no stimulus deal is reached. After a two-day policy meeting, the Fed released new projections in which 13 of 17 officials said they expect to keep rates near zero until 2023. The Fed, as expected kept interest rates on hold at near zero and pledged to keep them there until inflation rose significantly, through 2023.
This new development adds another layer of complexity in the upcoming election and what the future global trade regime might look like under another four years of President Trump. On the surface, it would seem that a Fed committed to rates near zero through at least 2023 would be something that would inspire the opposite reaction. The US regulator decided to leave the federal funds rate anchored in the range of 0.00-0.25% and pledged that rates would be kept low for a long time. One government, another government, and both are going to push on the Fed to hold our interest rates at historically low levels.
Yesterday, the Fed meeting took place, during which the regulator left the key interest rate unchanged at 0.00-0.25% per annum, as experts expected. No major surprises here, although some economists did not think the Fed would be able to agree on this new language until the November meeting. Would the Fed show any rate hikes in its updated forecasts, which now include the central bank’s expectations for 2023 for the first time?


Krach’s visit comes at a fraught time in the relationship between the world’s two largest economies on fronts ranging from Beijing’s crackdown on Hong Kong to trade and technology. The Beijing-based company is partnering with (ORCL) to form a new U.S.-based firm that would run TikTok’s global operations, where it will continue to hold a majority stake. The Chinese central bank (PBOC) is also extremely aggressive for a currency that is only used in 4 percent of global transactions according to the Bank of International Settlements.


In our last Brexit update, we rated a rudimentary trade deal and a WTO/no-deal exit as being equally likely. With job losses mounting, new social restrictions to counter rising infections, and trade talks with the European Union in peril, Britain looks set for a turbulent end to 2020. Johnson’s government has proposed a new law that would unilaterally revoke part of the withdrawal agreement, which was only negotiated with the EU last October. That said, in light of rising concerns over a possible second wave of COVID cases and a sizeable market repricing in no-deal Brexit risks.
EU officials see this first step as less problematic than a subsequent Open Fiber merger, the people said. We still think these probabilities are very close, but recent developments may now make the WTO version of a hard Brexit the most likely route forward. EU-UK Trade Negotiations: Political uncertainty and the repricing of no-deal Brexit risks have been heightened in recent sessions.
That said, the BoE meeting is unlikely to provide much in the way of volatility with external factors (Brexit, Risk Environment) playing a larger role for the currency. That’s when updated economic projections will be published, and just weeks before the end of the U.K.’s transition period for leaving the EU.Investors are likewise betting on action. Telecom Italia sent a preliminary notification to the EU of its FiberCop plan earlier this month, according to one person familiar with the matter.