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Commodities Daily Report

Monday| February 25, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn. 6104view:

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Commodities Daily Report


Monday| February 25, 2013

International Commodities
Overview
German Ifo Business Climate rose to 107.4-mark in February. Italian Retail Sales rose by 0.2 percent for the month of December. German Final GDP remained unchanged at -0.6 percent in Q4 2012. Belgium NBB Business Climate was at -11-mark in current month. Chinas HSBC Flash Manufacturing PMI declined to 50.4-mark in Feb. Asian markets are trading higher today on the back of expectations of aggressive monetary easing from the Bank of Japan. Chinas HSBC Flash Manufacturing PMI declined by 1.9 points to 50.4mark in February as against a rise of 52.3-level in January. US Dollar Index (DX) appreciated by 1.3 percent in the last week on the back of rise in risk aversion in the global market sentiments which led to increase in demand for the low yielding currency. Additionally, unfavorable economic data from the US and Euro Zone also supported an upside in the DX. Further, US equities also traded on a mixed note which also acted as a positive factor for the currency. However, sharp upside in the currency was capped as a result of German manufacturing and business confidence data coming on a positive note in the last week. The currency touched a weekly high of 81.70 and closed at 81.585 on Friday. On a weekly basis, Indian Rupee appreciated marginally by 0.1 percent. The currency appreciated as a result of rise in the foreign fund inflows after auction of $10 billion of government & corporate bonds for foreign investors on Friday. Further, expectations that Finance Minister will solve the fiscal deficit problem in the coming budget will act as a positive factor for the currency. However, sharp upside in the currency was capped on the back of US Federal Reserve statement on Thursday that central bank may slow or stop monthly bond buying program before the expected deadline. Apart from that, global and domestic market sentiments also traded on a weak note which exerted downside pressure on the currency. Further, strength in the DX also acted as a negative factor for the Indian Rupee. It touched high of 54.015 in the last week and closed at 54.265 against dollar on Friday. For the month of February 2013, FII inflows totaled at Rs.23,035.40 crores ($4,315.18 million) as on 22nd February 2013. Year to date basis, net capital inflows stood at Rs.45,094.40 crores ($8,374.50 million) till 22nd February 2013.

Market Highlights (% change)


Last INR/$ (Spot) 54.265 Prev day 0.4

as on 22 February, 2013 w-o-w 0.1 m-o-m -0.9 y-o-y -9.5

$/Euro (Spot)

1.3188

0.0

-1.3

-2.0

-1.3

Dollar Index NIFTY

81.59

0.0

1.3

2.2

2.7

5850.3

0.0

-0.6

-3.7

7.8

SENSEX

19317.0

0.0

-0.8

-3.9

5.6

DJIA

14000.6

0.9

0.2

0.8

7.8

S&P

1515.6

0.9

-0.3

1.5

11.5

Source: Reuters

The Euro depreciated by 1.3 percent in the last week taking cues from decline in Euro Zone manufacturing and services PMI data. Additionally, strength in the DX also exerted downside pressure on the currency. However, sharp downside in the currency was cushioned on the back of German and French manufacturing coming on a positive note. Further, fall in the currency was prevented as a result of German Final Gross Domestic Product (GDP) remained unchanged at -0.6 percent in the Q4 of 2012. German Ifo Business Climate rose to 107.4-mark in February from earlier rise of 104.2-level in January. Italian Retail Sales rose by 0.2 percent in December as compared to decline of 0.4 percent a month ago. Belgium National Bank of Belgium (NBB) Business Climate was at -11mark in February with respect to fall of 13.2-level in January. The Euro touched a weekly low of 1.3144 and closed at 1.3188 against dollar on Friday.

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Commodities Daily Report


Monday| February 25, 2013

International Commodities
Bullion Gold
Market Highlights - Gold (% change) Spot gold prices declined around 1.8 percent in the last week on the back of rise in risk aversion in the global market sentiments. Additionally, strength in the DX also exerted downside pressure on the gold prices. Further, weak global market sentiments and gold, which behaved as a risky asset in the prior week also acted as a negative factor for the prices. The worlds largest gold backed exchange traded fund New Yorks SPDR Gold Trust witnessed its largest one day outflow and dropped by 20.77 tonnes due to sharp fall in the prices. The yellow metal touched a weekly low of $1554.49/oz and closed at $1580.30/oz in the last trading session. On the MCX, April contract prices declined by 2.2 percent on the back of appreciation in the Indian Rupee and closed at Rs.29,487/10 gms on Friday after touching a low of Rs.29,263/10 gms in the last week.
Gold Gold (Spot) Unit $/oz Last 1580.3 Prev. day 0.3 as on 22 February, 2013 WoW -1.8 MoM -4.7 YoY -11.2

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April13) MCX Gold (April13)

Rs/10 gms $/oz

29250.0

0.3

-2.7

-4.6

2.3

1576.5

0.0

-2.2

-5.0

-11.3

$/oz

1572.4

-0.4

-2.3

-4.8

-11.9

Rs /10 gms

29487.0

-0.9

-2.2

-2.8

Source: Reuters

Silver
Taking cues from fall in gold prices coupled with downside in the base metals complex, Spot silver prices declined by 3.6 percent in the last week. In addition, stronger DX also acted as a negative factor for the silver prices. The white metal prices touched a weekly low of $28.26/oz and closed at $28.69/oz in the last trading session of the week. On the domestic front, prices declined by 5 percent as a result of appreciation in the Indian Rupee and closed at Rs.53,304/kg on Friday after touching a low of Rs.53,077/kg in the prior week.

Market Highlights - Silver (% change)


Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar13) MCX Silver (Mar13) Unit $/oz Rs/1 kg Last 28.7 55177.0 Prev day 0.2 0.8

as on 22 February, 2013 WoW -3.6 -3.9 MoM -7.9 -6.7 YoY -18.8 -3.9

$/oz $/ oz

2879.0 2845.6

0.2 -0.8

-4.6 -6.2

-8.8 -8.7

-16.7 -19.9

Rs / kg

53304.0

-1.5

-5.0

-8.5

Source: Reuters

Outlook
In the intraday, we expect precious metals to trade on a positive note on the back of rise in risk appetite in the global market sentiments. Weakness in the DX will also support an upside in the precious metal prices. In the Indian markets, appreciation in the Indian Rupee will cap sharp gains in the prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver Mar13 $/oz Rs/10 gms $/oz Rs/kg valid for February 25, 2013 Support 1578/1573 29500/29400 28.65/28.45 53400/53000 Resistance 1589/1594 29700/29800

Technical Chart Spot Gold

Source: Telequote

28.98/29.15 54000/54300

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Commodities Daily Report


Monday| February 25, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined by 2.8 percent in the last week taking cues from more than expected rise in the US crude oil inventories coupled with negative statement from the US Federal Reserve that central bank may stop bond buying program before the expected deadline. Additionally, unfavorable economic data from the US and Euro Zone coupled with strength in the DX also exerted downside pressure on the crude prices. Crude oil prices touched a weekly low of $92.44/bbl and closed at $93.13/bbl in the last trading session of the week. On the domestic bourses, prices declined by 2.5 percent and closed at Rs.5,069/bbl on Friday after touching a low of Rs.5,041/bbl in the last week. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (April 13) ICE Brent Crude (March13) MCX Crude (Mar 13) Unit $/bbl $/bbl $/bbl Last 93.1 114.9 93.1 Prev. day 0.4 -0.4 0.3 WoW -2.9 -3.1 -4.3 as on 22 February, 2013 MoM -2.1 0.2 -2.9 YoY -13.3 -8.9 -13.6

$/bbl

114.1

0.5

-3.0

0.7

-7.7

Rs/bbl

5069.0

-0.6

-2.5

-2.4

Source: Reuters

Market Highlights - Natural Gas


Natural Gas (NG) Nymex NG MCX NG (Feb 13) Unit $/mmbtu Rs/ mmbtu Last 3.278 177.7

(% change)

as on 22 February, 2013

Natural Gas
On a weekly basis, Nymex natural gas prices declined around 3.7 percent on the back of expectations of warmer winter weather conditions which will lead to fall in demand for the fuel. Further, strength in the DX also exerted downside pressure on the gas prices. However, sharp downside in the gas prices was cushioned as a result of more than forecasted decline in US natural gas inventories. Gas prices touched low of $3.135/mmbtu in the last week and closed at $3.278/mmbtu on Friday. On the domestic front, prices fell by 3.3 percent as a result of nd appreciation in the Indian Rupee and closed at Rs.177.7/mmbtu on 22 February, 2013 after touching a weekly low of Rs.171.1/mmbtu. Outlook In todays session, we expect crude oil prices to trade with negative bias due to expectations of international talks on Irans nuclear program. Further, decline in Chinas manufacturing PMI will also led to forecast for fall in demand for the fuel which will exert downside pressure on the prices. Sharp downside in the prices will be cushioned on account of weakness in the DX coupled with upbeat global market sentiments. Appreciation in the Indian Rupee will act as a negative factor for crude prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude March 13 $/bbl Rs/bbl valid for February 25, 2013 Support 92.50/91.90 5040/5010 Resistance 93.80/94.40 5110/5140

Prev. day 1.11 -0.45

WoW 3.70 3.31

MoM -8.10 -7.59

YoY 23.23 38.61


Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report


Monday| February 25, 2013

International Commodities
Base Metals
The base metals pack traded on a negative note on the back of negative statement from US Federal Reserve that it may stop bond buying program along with unfavourable economic data from the US and Euro Zone. Further, strength in the DX also exerted downside pressure on the prices. Additionally, rising LME inventories also acted as a negative factor for the prices. In the Indian markets, appreciation in the Rupee added downside pressure on the prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb13) LME Aluminum (3 month) MCX Aluminum (Feb13) LME Nickel (3 month) MCX Nickel (Feb13) LME Lead (3 month) MCX Lead Feb13) LME Zinc (3 month) MCX Zinc (Feb13) Rs /kg 112.3 -2.1 -4.3 0.9 $/tonne 2086.0 -1.3 -4.2 0.3 1.5 Rs /kg 124.8 -1.3 -5.7 -1.8 $/tonne 2307.0 -0.8 -5.5 -2.5 6.7 Rs /kg 917.5 0.5 -7.8 -1.7 $/tonne 16947.0 1.2 -7.5 -2.4 -15.4 Rs /kg 109.2 -2.2 -5.7 0.3 $/tonne 2047.3 -1.3 -5.4 -0.2 -10.0 Rs/kg 423.6 -1.3 -5.5 -3.0 $/tonne Last 7817.3 Prev. day -0.4 as on 22 February, 2013 WoW -5.1 MoM -0.4 YoY -6.8

Copper
Copper the leader of the base metal pack declined by 5.1 percent in the last week on account of decline in manufacturing PMI economic data from the US and Euro Zone. In addition, strength in the DX and marginal rise in the LME copper inventories by 0.1 percent which stood at 424,350 tonnes also acted as a negative factor for the prices. The red metal touched a low of $7,796/tonne in the last week and closed at $7,817.25/tonne in the last trading session. On the domestic front, prices fell by 5.5 percent as a result of appreciation in the Indian Rupee and closed at Rs.423.55/kg on Friday after touching a low of Rs.423/kg in the last week. Copper Inventories LME copper inventories gained 0.1 percent week on week and stood at 424,350 tonnes as on 22nd February, 2013 as against 401,675 tonnes on 15th February, 2013. Copper inventories in the warehouse monitored by the Shanghai fell by 5.6 percent and stood at 207,709 tonnes for the week th ending on 8 February, 2013. Outlook In the intra-day, we expect base metals prices to trade lower on the back of Chinas manufacturing PMI data coming on a negative note. However, sharp downside will be cushioned as a result of upbeat global market sentiments coupled with weakness in the DX. Appreciation in the Indian Rupee will add downside pressure on the MCX. Technical Outlook valid for February 25, 2013
MCX Copper Feb13 MCX Zinc Feb 13 MCX Lead Feb 13 MCX Aluminum Feb13 MCX Nickel Feb 13 Unit Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg Support 421/419 111.80/111.0 124.30/123.20 108.50/107.80 911/902 Resistance 426/429 113.40/114.50 126.0/127.0 110.0/110.80 927/935

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 22 February 424,350 5,164,200 154,500 1,185,150 288,025
nd

21 February 420,250 5,158,025 154,398 1,189,650 288,500

st

Actual Change 4,100 6,175 102 -4,500 -475

(%) Change 1.0 0.1 0.1 -0.4 -0.2


Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report


Monday| February 25, 2013

International Commodities
Important Events for Today
Indicator HSBC Flash Manufacturing PMI Italian Parliamentary Election BBA Mortgage Approvals German Buba President Weidmann Speaks Country China Euro UK Euro Time (IST) 7:15am Day 2 3:00pm 9:00pm Actual 50.4 Forecast 52.2 34.2K Previous 52.3 33.6K Impact High High Medium Medium

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