The 12 largest global investment banks saw their commodities-related revenue drop by 1% to $2 billion during the first half of 2019, according to a report by Coalition. The consultancy noted that while oil revenues increased significantly, "power and gas declined due to fewer large structured deals."
A drop in global bond yields has investors moving into precious metals at the highest level in years as they search for a haven from market turmoil pressures brought on by the US-China trade war. "Traders that had been out of the metals market are coming back… and there's been a lot of buying from new accounts," says RJO Futures senior commodities broker Bob Haberkorn.
CME Group plans to launch two new financially-settled Shanghai gold futures contracts to be denominated in US dollars and renminbi on Oct. 14. Both contracts will be listed on COMEX, pending regulatory approvals.
Citigroup analysts say gold could be on track to break the $2,000 per ounce barrier as the US cuts interest rates and growth slows. The 2020 US election could also contribute to a boost in prices for the precious metal.
US oil production will grow at a rate of 1.25 million bpd and hit a fresh high of 12.24 million bpd this year, while 2020 output will climb by 990,000 bpd to 13.23 million bpd, according to the latest Energy Information Administration projections. Meanwhile, domestic dry natural gas production will soar to a record of 91.39 billion cubic feet per day this year and reach 93.19 Bcf/d in 2020, the EIA said.
A move by hedge funds in August to make the biggest bets against the price of natural gas in over a decade has ended badly, as natural gas futures for October delivery have increased by 25% from a three-year low reached on Aug. 5.
Equities have suffered in the US-China trade war due to supply chain disruptions that cut into margins. CME Group Chief Economist Blu Putnam says companies are protecting market their market, even if it cuts into their profits.
The Commodity Futures Trading Commission's Commitment of Traders report is a key tool for traders with a wide range of approaches as to how to use this information. "We have noticed the large speculator group in the COT report have amassed a near-record net long position in gold futures traded on the COMEX division of the CME Group," writes Carley Garner.
China has announced exclusions to its 25% tariff on certain US goods, including taking lubricant oil and pharmaceuticals off the list. The exemptions cover $1.65 billion in products, but tariffs are expected to remain in place on most US farm products.
The Saudi government has removed energy minister Khalid al-Falih from his position, marking a fall from grace for Falih as Crown Prince Mohammed bin Salman moves to speed up Aramco's IPO. Falih was well respected in the oil industry.
Though Facebook's libra and other cryptocurrencies might be based outside the US, they must comply with US rules that combat money laundering, says Sigal Mandelker, undersecretary of terrorism and financial intelligence at the Treasury Department. "Whether it's bitcoin, ethereum, libra, our message is the same to all of these companies: Anti-money laundering and combating the financing of terrorism has to be built into your design from the get-go," Mandelker says.
Former Federal Reserve Chairman Paul Volcker has told Chairman Jerome Powell a proposal that would ease restrictions on banks' stakes in private equity funds and hedge funds and that would narrow banks' trading limits would weaken the Volcker rule's core concepts. "The new rule amplifies risk in the financial system, increases moral hazard and erodes protections against conflicts of interest that were so glaringly on display during the last crisis," Volcker says in a letter to Powell.