Soybean production may drop sharply, US Fed may cut interest rates by 25 bps & OPEC cuts forecast for growth in world oil demand

07th Sept – 13th Sept

1. Soybean production may drop sharply after excess rainfall and floods in parts of Madhya Pradesh and Maharashtra

Sept 09, 2019

Soybean had been planted over 11.27 million hectares (ha) till recently, 0.8 per cent higher year-on-year, according to Farm Ministry data. In Madhya Pradesh, the largest producer of soybean, the crop has been planted over 5.48 mn ha so far, up 3 per cent year on-year. In Maharashtra, it has been sown over 3.95 mn ha, up 0.8 per cent. However, nearly 7 per cent of soybean acreage was under stress due to water logging and excessive rains in parts of Madhya Pradesh and Maharashtra, the Soybean Processors Association of India indicated, subsequent to a crop survey.

Source: The Asian Age

2. Sovereign gold bonds issue closes on 13th Sept

Sept 11, 2019

Sovereign gold bonds are a good option to take exposure to gold as an asset class, believe financial planners. Gold bonds do not have any expense and investors earn an additional 2.5 per cent interest every year and these are one of the best ways to take an exposure on gold. Sovereign gold bonds were available at Rs 3,840 per gram for digital payments and Rs 3,890 per gram for payments through the physical mode.

Source: Economic Times

3. China’s exports fell 1% last month from a year earlier

Sept 09, 2019

China’s exports fell 1% last month from a year earlier as shipments to the United States slowed sharply amidst a trade war, compared to analyst expectations of a 2% rise. Imports declined 5.6%, but at a slower pace than the analyst forecasts of a 6% drop.

Source: Reuters

4. China’s August imports of unwrought copper fell 3.8% year-on-year

Sept 09, 2019

China’s August imports of unwrought copper fell 3.8% year-on-year to 404,000 tonnes, while unwrought aluminium exports declined 9.9% to 466,000 tonnes due to unexpected production outages at two key smelters.

Source: Reuters

5. US Federal Reserve may cut interest rate by 25 bps next week, President Trump seeks negative rate

Sept 12, 2019

There is a high possibility that the US Federal Reserve may cut interest rates by 25 bps in the September month’s meeting next week, which will keep gold prices supported at lower levels. Meanwhile President Trump, in a pair of Twitter posts, said negative rates would save the government money on its debt. He tweeted that the Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt.

Source: Economic Times

6. ECB to restart bond purchases at a rate of 20 billion Euros a month from Nov. 1

Sept 12, 2019

The European Central Bank approved a fresh stimulus package as expected on Thursday, cutting interest rates and approving a new round of bond purchases.  It will buy 20 billion Euros ($22 billion) a month in government and corporate bonds for as long as needed. The Central Bank furthermore extended its promise to keep rates at record lows until inflation goes back up to its goal of just under 2%.

Source: Business Standard

7. Saudi Arabia signals to continue with OPEC’s oil production cut

Sept 09, 2019

The new Saudi energy minister, Prince Abdulaziz bin Salman, confirmed expectations that he would stick with his country’s policy of limiting crude output to support prices. Prince Abdulaziz said the pillars of Saudi Arabia’s policy would not change and a global deal to cut oil production by 1.2 million barrels per day would survive. He added that the so-called OPEC+ alliance between OPEC and non-member countries including Russia was staying for the long term.

Source: CNBC

8. OPEC forecasts oil demand to be lower in 2020 due to economic slowdown

Sept 11, 2019

OPEC cut its forecast for growth in world oil demand in 2020 due to an economic slowdown. Oil demand worldwide would expand by 1.08 million barrels per day, 60,000 bpd less than previously estimated by OPEC, and indicated that the market would be in a surplus. OPEC, in the report, lowered its forecast for world economic growth in 2020 to 3.1% from 3.2%.

Source: Reuters