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Commodities Daily Report

Wednesday| February 27, 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
Wednesday| February 27, 2013

International Commodities
Overview
US Consumer Confidence increased to 69.6-level in February. UK’s CBI Realized Sales declined to 8-mark in the current month. US New Home Sales data rose by 59,000 to 437,000 in January. Japan’s Retail Sales declined by 1.1 percent in the last month. Asian markets are trading higher apart from Japan on the back of favorable consumer confidence and home sales economic data from US. Additionally, Fed Chairman Ben Bernanke statement of supporting the US Federal Reserve decision of bond buying program also led to upbeat global market sentiments. US Standard & Poor's (S&P) / Case-Shiller (CS) Composite-20 House Price Index (HPI) increased by 6.8 percent in December as against a rise of 5.4 percent a month ago. House Price Index (HPI) rose by 0.6 percent in December from earlier rise of 0.4 percent in prior month. Richmond Manufacturing Index was at 6-mark in February as compared to decline of 12-level in January. The Conference Board (CB) Consumer Confidence increased by 11.2 points to 69.6-level in February with respect to rise of 58.4-mark in earlier month. New Home Sales data rose by 59,000 to 437,000 in January when compared to increase of 378,000 in previous month. US Dollar Index (DX) appreciated by 0.2 percent in yesterday’s trading session on the back of rise in risk aversion in the global market sentiments in the early part of the trade which led to increase in demand for the low yielding currency. However, sharp upside in the currency was capped as a result of favorable economic data from the US coupled with Fed Chairman Ben Bernanke supporting the US Federal Reserve bond buying program. The currency touched an intra-day high of 82.04 and closed at 81.94 on Tuesday. Indian Rupee appreciated by 0.4 percent in yesterday’s trading session. The currency depreciated as a result of month end dollar demand from the importers coupled with weak global market sentiments in the early part of the trade. Additionally, strength in the DX in the initial part of the trade also exerted downside pressure on the currency. Further, weak domestic market sentiments also acted as a positive factor for the currency. The Indian Rupee touched an intra-day low of 54.265 and closed at 54.09 against dollar on Tuesday. For the month of February 2013, FII inflows totaled at Rs.23,513.60 crores ($4,403.38 million) as on 26th February 2013. Year to date basis, net capital inflows stood at Rs.45,572.60 crores ($8,462.70 million) till 26th February 2013.

Market Highlights (% change)
Last INR/$ (Spot) 54.085 Prev day -0.2

as on 26 February, 2013 w-o-w 0.1 m-o-m -0.8 y-o-y -9.1

$/Euro (Spot)

1.3061

0.0

-2.4

-3.2

-2.5

Dollar Index NIFTY

81.94

0.2

1.7

2.9

3.1

5761.4

-1.6

-3.0

-4.8

7.2

SENSEX

19015.1

-1.6

-3.2

-4.9

4.0

DJIA

13900.1

0.8

-1.0

-0.4

7.1

S&P

1496.9

0.6

-2.2

-0.4

9.6

Source: Reuters

The Euro depreciated marginally by 0.01 percent in yesterday’s trade on the back of fears that Italy’s election results won’t be able to form the government in the majority which lead to return of the Euro Zone debt crisis. Additionally, strength in the DX also exerted downside pressure on the currency. The Euro touched an intra-day low of 1.3017 and closed at 1.3061 against dollar on Tuesday. UK’s Confederation of British Industry (CBI) Realized Sales declined by 9 points to 8-mark in February as against a rise of 17-level in January. Japan’s Retail Sales declined by 1.1 percent in January as against a rise by 0.3 percent in December.

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Commodities Daily Report
Wednesday| February 27, 2013

International Commodities
Bullion Gold
Market Highlights - Gold (% change) Spot gold prices increased around 1.2 percent yesterday on the back of rise in risk appetite in the global market sentiments. Additionally, positive statement from US Fed Chairman Ben Bernanke of supporting the US Federal Reserve decision of bond buying program also supported an upside in the gold prices. However, strength in the DX capped sharp gains in the gold prices. The yellow metal touched an intra-day high of $1,619.66/oz and closed at $1,613.10/oz in yesterday’s trading session. In the Indian markets, prices gained on account of depreciation in the Indian Rupee by 1.6 percent and closed at Rs.30,092/10 gms after touching an intra-day high of Rs.30,139/10 gms on Tuesday.
Gold Gold (Spot) Unit $/oz Last 1613.1 Prev. day 1.2 as on 26 February, 2013 WoW 0.6 MoM -3.0 YoY -8.6

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April’13) MCX Gold (April’13)

Rs/10 gms $/oz

29400.0

0.3

-1.2

-3.1

2.9

1590.5

0.3

-1.1

-4.4

-10.2

$/oz

1615.2

1.8

2.4

-3.9

-8.9

Rs /10 gms

30092.0

1.6

0.1

-0.5

-

Source: Reuters

Silver
Taking cues from rise in gold prices coupled with upside in the base metals, Spot silver prices rose by 1.2 percent in yesterday’s trading session. However, sharp upside in the prices was capped as result of strength in the DX. The white metal prices touched an intra-day high of $29.45/oz and closed at $29.36/oz on Tuesday. On the domestic front, prices increased by 1.1 percent and closed at Rs.54,582/kg after touching an intra-day high of Rs.54,739/kg in yesterday’s trade. Depreciation in the Indian Rupee also supported an upside in the prices.

Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Mar’13) MCX Silver (Mar’13) Unit $/oz Rs/1 kg Last 29.4 55300.0 Prev day 1.2 -0.2

as on 26 February, 2013 WoW -0.2 -3.1 MoM -6.4 -5.2 YoY -17.0 -4.9

$/oz $/ oz

2875.0 2925.6

-1.4 0.0

-4.2 2.2

-7.4 -9.0

-18.1 -21.2

Rs / kg

54582.0

1.1

-1.1

-5.7

-

Source: Reuters

Outlook
In the intraday, we expect precious metals to trade on a positive note on the back of upbeat global market sentiments coupled with weakness in the DX. Additionally, favorable economic data from US and optimistic statement from US Fed Chairman will also support an upside in the gold prices. In the Indian markets, appreciation in the Rupee will cap sharp gains in the prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Apr’13 Spot Silver MCX Silver Mar’13 $/oz Rs/10 gms $/oz Rs/kg valid for February 27, 2013 Support 1607/1600 29980/29850 28.70/28.50 54200/53800 Resistance 1616/1620 30150/30220 29.05/29.25 54900/55200

Technical Chart – Spot Gold

Source: Telequote

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Commodities Daily Report
Wednesday| February 27, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined by 0.5 percent yesterday taking cues from rise in the US crude oil inventories coupled with strength in the DX. However, sharp downside in the prices was cushioned as a result of favorable economic data from US coupled with positive statement from US Fed Chairman Ben Bernanke of supporting the US Federal Reserve decision of bond buying program. Crude oil prices touched an intra-day low of $91.92/bbl and closed at $92.60/bbl in yesterday’s trading session. On the domestic bourses, prices declined by 0.5 percent and closed at Rs.5,028/bbl after touching an intra-day low of Rs.5,002/bbl on Tuesday. Depreciation in the Indian Rupee prevented sharp fall in the prices on the MCX. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories rose by 904,000 barrels to 373.39 million barrels for the week ending on 22nd February 2013. Gasoline inventories fell by 1.4 million barrels to 231.60 million barrels and whereas distillate inventories dropped by 1.7 million barrels to 124.33 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:00pm IST and US crude oil inventories is expected to rise by 2.4 million barrels for the week ending on 22nd February 2013. Gasoline stocks are expected to fall by 0.9 million barrels whereas distillate inventories are expected to drop by 1.4 million barrels for the same period. Outlook In today’s session, we expect crude oil prices to trade with positive bias due to favorable economic data from US coupled with weakness in the DX. Additionally, optimistic statement from US Fed Chairman Ben Bernanke will also support an upside in the prices. Sharp upside in the prices will be capped on account of expectations of rise in US crude oil inventories. In the Indian markets, appreciation in the Rupee will prevent upside in the prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude March ’13 $/bbl Rs/bbl valid for February 27, 2013

Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (April ’13) ICE Brent Crude (March’13) MCX Crude (Mar ’13) Unit $/bbl $/bbl $/bbl Last 92.6 114.1 92.6 Prev. day -0.1 -1.4 -0.5 WoW -4.2 -3.4 -4.2

as on 26 February, 2013 MoM -5.1 -2.0 -5.1 YoY -14.6 -9.9 -14.7

$/bbl

112.7

-1.5

-4.1

-1.4

-9.2

Rs/bbl

5028.0

-0.5

-3.5

-3.8

Source: Reuters

Market Highlights - Natural Gas
Natural Gas (NG) Nymex NG MCX NG (Mar ’13) Unit $/mmbtu Rs/ mmbtu Last 3.449 187.9

(% change)

as on 26 February, 2013

Prev. day -0.63 2.18

WoW 5.35 5.74

MoM 0.00 0.75

YoY 35.36 52.02
Source: Reuters

Technical Chart – NYMEX Crude Oil

Source: Telequote

Technical Chart – NYMEX Natural Gas

Support 91.90/91.0 5020/4970

Resistance 93.20/94.0 5090/5130
Source: Telequote

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Commodities Daily Report
Wednesday| February 27, 2013

International Commodities
Base Metals
The base metals pack traded on a positive note on the back of favourable consumer confidence and new home sales data from the US. However, sharp upside in the prices was capped on the back of rise in LME inventories except Zinc coupled with strength in the DX. In the Indian markets, depreciation in the Rupee also supported an upside in the prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Feb’13) LME Aluminum (3 month) MCX Aluminum Rs /kg 107.8 0.0 -4.5 -0.7 $/tonne 2033.8 0.0 -3.8 -1.5 -12.3 Rs/kg 426.4 0.9 -2.5 -2.6 $/tonne Last 7892.3 Prev. day 0.8 as on 26 February, 2013 WoW -2.0 MoM 0.6 YoY -7.3

Copper
Copper the leader of the base metal pack rose by 0.8 percent in yesterday’s trading session on the back of favourable economic data from US. Apart from that, positive statement from US Fed Chairman Ben Bernanke also supported an upside in the prices. However, sharp upside in the prices was capped as a result of rise in the LME Copper inventories by 1.8 percent which stood at 438,375 tonnes coupled with strength in the DX. The red metal touched an intra-day high of $7,906.50/tonne and closed at $7,892.30/tonne in the yesterday’s trading session. On the domestic front, prices gained by 0.9 percent as a result of depreciation in the Indian Rupee and closed at Rs.426.40/kg after touching an intra-day high of Rs.427.20/kg on Tuesday. Outlook In the intra-day, we expect base metals prices to trade higher on the back of positive economic data from the US coupled with weakness in the DX. Further, expectations of increase in the US pending home sales data and core durable goods orders will also act as a positive factor for the prices. Appreciation in the Indian Rupee will cap sharp gains in the prices on the MCX. Technical Outlook
Unit MCX Copper Feb’13 MCX Zinc Feb ’13 MCX Lead Feb ’13 MCX Aluminum Feb’13 MCX Nickel Feb ’13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for February 27, 2013 Support 423/420 113.50/112.50 124.40/123.50 107.0/106.40 898/890 Resistance 428/430 115.0/115.80 126.0/126.80 108.50/109.50 914/921

(Feb’13) LME Nickel (3 month) MCX Nickel (Feb’13) LME Lead (3 month) MCX Lead Feb’13) LME Zinc (3 month) MCX Zinc (Feb’13)
Source: Reuters

$/tonne

16728.0

0.1

-4.1

-6.2

-16.9

Rs /kg

904.6

0.6

-4.2

-5.0

-

$/tonne

2309.0

0.6

-3.1

-4.1

2.9

Rs /kg

125.1

1.0

-2.8

-2.6

-

$/tonne

2108.0

1.0

-2.1

0.3

0.7

Rs /kg

114.1

1.5

-1.3

2.2

-

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 26 February 438,375 5,155,775 156,834 1,176,125 288,100
th

25 February 430,725 5,157,100 155,568 1,180,650 287,925

th

Actual Change 7,650 -1,325 1,266 -4,525 175

(%) Change 1.8 0.0 0.8 -0.4 0.1
Source: Reuters

Technical Chart – LME Copper

Source: Telequote

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Commodities Daily Report
Wednesday| February 27, 2013

International Commodities
Important Events for Today
Indicator MPC Member Fisher Speaks Retail Sales y/y GfK German Consumer Climate M3 Money Supply y/y MPC Member Bean Speaks Second Estimate GDP q/q Prelim Business Investment q/q Italian 10-y Bond Auction Core Durable Goods Orders m/m Durable Goods Orders m/m Fed Chairman Bernanke Testifies Pending Home Sales m/m Crude Oil Inventories ECB President Draghi Speaks Country UK Japan Euro Euro UK UK UK Euro US US US US US Euro Time (IST) 12:00am 5:20am 12:30pm 2:30pm 2:50pm 3:00pm 3:00pm Tentative 7:00pm 7:00pm 8:30pm 8:30pm 9:00pm 11:00pm Actual -1.1% Forecast -1.4% 5.9 3.2% -0.3% 2.2% 0.3% -4.8% 1.7% 2.4M Previous 0.3% 5.8 3.3% -0.3% 3.8% 4.17/1.3 1.0% 4.3% -4.3% 4.1M Impact Medium Medium Medium Medium Medium High Medium Medium High Medium High High Medium High

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