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Commodities Daily Report

Thursday| March 21, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn :6130 Saif Mukadam – Research Analyst saif.mukadam@angelbroking.com (022) 2921 2000 Extn :6136 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report
Thursday| March 21, 2013

International Commodities
Overview
US Federal Funds Rate kept unchanged at 0.25 percent in March. Europe Current Account was at surplus of 14.8 bn Euros in January. UK’s Claimant count change was at -1500 in the month of February. Japan’s Trade Balance at a deficit of 1.09 trillion Yen in last month. Asian markets are trading higher today on the back of US Federal Reserve statement that it will continue with its stimulus measures program coupled with expectations of monetary easing from Bank of Japan. US Federal Funds Rate kept unchanged at 0.25 percent in the month of March. China’s HSBC Flash Manufacturing Purchasing Managers' Index (PMI) increased by 1.3 points to 51.7-mark in March as against a rise of 50.4level in February. US Dollar Index (DX) depreciated by 0.3 percent in the yesterday’s trading session on the back of rise in risk appetite in the global market sentiments which led to fall in demand for the low yielding currency. Additionally, statement from US Federal Reserve that it will continue with its bond buying program also exerted downside pressure on the currency. Further, US equities traded on a positive which acted as an unfavorable factor for the DX. The currency touched an intra-day low of 82.725 and closed at 82.95 on Wednesday. The Indian Rupee traded on a flat note in yesterday’s trading session. The currency marginally depreciated on the back of withdrawal of support to the Congress leading UPA government by the DMK. Additionally, weak domestic market sentiments also exerted downside pressure on the currency. Further, dollar demand from oil importers also acted as a negative factor for the currency. The Indian Rupee touched an intra-day low of 54.56 and closed at 54.36 against dollar on Wednesday. For the month of March 2013, FII inflows totaled at Rs.7,295.40 crores ($1,338.03 million) as on 20th March 2013. Year to date basis, net capital th inflows stood at Rs.53,793.50 crores ($9,972.60 million) till 20 March 2013. UK’s Claimant count change was at -1500 in February as compared to 12,500 in January. UK’s Unemployment rate remained unchanged to 7.8 percent in January.

Market Highlights (% change)
Last INR/$ (Spot) 54.32 Prev day 0.3

as on 20 March, 2013 w-o-w 0.1 m-o-m -0.5 y-o-y -7.0

$/Euro (Spot)

1.2932

0.4

-0.2

-2.6

-2.2

Dollar Index NIFTY

82.95

-0.3

0.1

2.2

4.4

5694.4

-0.9

-2.7

-4.2

6.1

SENSEX

18884.2

-0.7

-2.5

-3.9

3.3

DJIA

14511.7

0.4

0.4

4.5

10.2

S&P

1558.7

0.7

0.3

3.1

10.9

Source: Reuters

The Euro appreciated by 0.4 percent in yesterday’s trade as the Cyprus government is looking forward to the alternatives to avoid banking collapse in the nation and European Central Bank (ECB) gave assurance to provide liquidity to Cyprus. Further, expectation in the market that Russia may provide aid to Cyprus also supported Euro. Additionally, optimistic global market sentiments coupled with weakness in DX supported currency. German Producer price index (PPI) decreased by 0.1 percent in February as compared to rise of 0.8 percent in January. Europe Current Account was at surplus of 14.8 billion Euros in January as against a previous surplus of 16.0 billion Euros a month ago. The Euro touched an intra-day high of 1.2978 and closed at 1.2932 against dollar on Wednesday. Japan’s Trade Balance was at a deficit of 1.09 trillion Yen in February as against a previous deficit of 0.74 trillion Yen in January.

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Commodities Daily Report
Thursday| March 21, 2013

International Commodities
Bullion Gold
Spot gold prices decreased by 0.4 percent in the yesterday trading session as the US Federal Reserve cut its forecast for Unemployment. Further, Cyprus government is looking forward to the alternatives to avoid banking collapse in the nation pressured the demand for safe haven. However, expectation of further monetary policy easing from major central banks coupled with weakness in DX cushioned sharp decline in prices. The yellow metal touched an intra-day low of $1602.94/oz and closed at $1605.9/oz in yesterday’s trading session. In the Indian markets, prices ended on negative note in the yesterday trading session and closed at Rs.29681/10 gms after touching an intra-day low of Rs. 29661/10 gms on Wednesday. Depreciation in the Indian rupee prevented sharp downfall in prices. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1605.9 Prev. day -0.4 as on 20 March, 2013 WoW 1.2 MoM 2.8 YoY -2.6

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

Rs/10 gms $/oz

29750.0

0.4

0.7

1.2

7.4

1607.5

-0.2

1.1

1.2

-3.0

$/oz

1607.5

0.2

1.2

1.9

-3.6

Rs /10 gms

29681.0

-0.6

0.7

0.3

6.8

Silver
Taking cues from fall in gold prices, spot silver prices ended on negative note by 0.4 percent on Wednesday. However, optimistic global market sentiments coupled with weakness in DX cushioned sharp decline in prices. The white metal prices touched an intra-day low of $28.6 /oz and closed at $28.8/oz in yesterday’s trade. On the domestic front, prices ended on a negative note by 0.7 percent and closed at Rs. 54331/kg after touching an intra-day low of Rs. 54279/kg on Wednesday. Depreciation in the Indian rupee cushioned sharp downfall in prices. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May’13) MCX Silver (May’13) Unit $/oz Rs/1 kg Last 28.8 55300.0 Prev day -0.4 0.6

Source: Reuters

as on 20 March, 2013 WoW -0.4 -0.2 MoM 0.8 -0.8 YoY -10.4 -2.5

$/oz $/ oz

2890.0 2878.3

0.2 -0.1

-0.8 -0.5

-0.7 0.3

-10.3 -9.5

Rs / kg

54331.0

-0.7

-0.8

1.1

-3.8

Outlook
In the intraday, we expect precious metals to trade on a positive note on the back of optimistic global market sentiments coupled with weakness in DX. Further, expectation of positive economic data from major global economies will act as a positive factor for the prices. In the Indian markets sharp upside in the prices will be prevented as a result of appreciation in the Rupee. Technical Outlook
Unit Spot Gold MCX Gold Apr’13 Spot Silver MCX Silver May’13 $/oz Rs/10 gms $/oz Rs/kg valid for March 21, 2013 Support 1603/1597 29620/29520 28.75/28.65 54180/54030 Resistance 1611/1618 29780/29900 28.95/29.10 54600/54850

Source: Reuters

Technical Chart – Spot Gold

Source: Telequote

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Commodities Daily Report
Thursday| March 21, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased around 0.9 percent yesterday taking cues from US Federal Reserve statement that it will continue with its bond buying program. Additionally, unexpected decline in US crude oil inventories supported an upside in the oil prices. Weakness in the DX also acted as a positive factor for the prices. Oil prices touched an intra-day high of $93.28/bbl and closed at $93.20/bbl in yesterday’s trading session. On the domestic bourses, prices rose by 1.6 percent on account of depreciation in the Indian Rupee and closed at Rs.5092/bbl after touching an intra-day high of Rs.5114/bbl on Wednesday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories declined unexpectedly by 1.31 million barrels to 382.70 million barrels for the week ending on 15th March 2013. Gasoline stocks fell by 1.5 million barrels to 222.80 million barrels and whereas distillate stockpiles dropped by 0.7 million barrels to 119.80 million barrels for the last week. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May ’13) ICE Brent Crude (April’13) MCX Crude (April ’13) Unit $/bbl $/bbl $/bbl Last 93.2 108.7 93.0 Prev. day 0.8 0.1 0.9 WoW 0.8 0.0 0.5 as on 20 March, 2013 MoM -1.8 -7.4 0.1 YoY -11.8 -13.5 -12.0

$/bbl

108.7

1.2

0.2

-6.0

-12.4

Rs/bbl

5092.0

1.6

1.0

-1.4

-5.6
Source: Reuters

Market Highlights - Natural Gas
Natural Gas (NG) Nymex NG MCX NG (Mar ’13) Unit $/mmbtu Rs/ mmbtu Last 3.949 215.2

(% change)

as on 20 March, 2013

Prev. day -0.4 -0.5

WoW 7.28 7.01

MoM 20.76 20.56

YoY 69.56 80.54
Source: Reuters

Technical Chart – NYMEX Crude Oil

Natural Gas
EIA Inventories Forecast US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to decline by 70 billion cubic feet (bcf) for the week ending on 15th March 2013. Outlook From the intra-day perspective, we expect crude oil to trade on positive note on the back of upbeat global market sentiments coupled with weakness in the DX. Additionally, US Federal Reserve statement of continuing its bond buying program coupled with ECB giving assurance to Cyprus to provide liquidity will also support an upside in the prices. In the Indian markets, appreciation in the Rupee will cap sharp gains in the prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude April ’13 $/bbl Rs/bbl valid for March 21, 2013 Support 92.70/92.0 5060/5020 Resistance 94.0/94.70 5130/5170

SSource: Telequote

Technical Chart – NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report
Thursday| March 21, 2013

International Commodities
Base Metals
The base metals pack traded on a positive note on the back of optimistic global market sentiments coupled with weakness in DX. Further, US Federal Reserve decision to continue its bond buying program also supported prices to trade green. Additionally, negative LME inventory data except copper acted as a positive factor. However, unfavourable economic data from UK prevented sharp gains in prices. On the MCX, depreciation in the Indian Rupee supported prices to trade positive. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April’13) LME Aluminum (3 month) MCX Aluminum (Mar’13) LME Nickel (3 month) MCX Nickel (Mar’13) LME Lead (3 month) MCX Lead Rs /kg 118.2 0.4 -3.2 -6.8 15.5 $/tonne 2184.0 0.6 -2.9 -7.3 7.7 Rs /kg 915.4 1.2 -0.9 -0.9 -4.6 $/tonne 16815.0 1.1 -0.9 -1.4 -11.5 Rs /kg 104.1 -0.1 -1.7 -7.2 -7.1 $/tonne 1943.0 0.3 -1.5 -7.7 -13.8 Rs/kg 417.2 1.1 -2.5 -3.5 -3.1 $/tonne Last 7619.0 Prev. day 1.5 as on 20 March, 2013 WoW -2.2 MoM -2.9 YoY -9.8

Copper
Copper, the leader of the base metal pack increased by 1.5 percent in yesterday’s trade on the back of optimistic global market sentiments coupled with weakness in DX. Further, US Federal Reserve decision to continue its bond buying program supported prices to trade on positive note. Additionally, Cyprus government is looking forward to the alternatives to avoid banking collapse in the nation also supported prices to gain strength. However, sharp rise in LME Copper inventories by 0.7 percent which stood at 550,825 tonnes prevented sharp upside movement in the prices. The red metal touched an intra-day high of $7633.75/tonne and closed at $7619/tonne yesterday’s trading session. On the domestic front, prices ended on positive note and closed at Rs. 417.2/kg on Wednesday after touching an intra-day high of Rs 418.2/kg. Depreciation in the Indian Rupee supported prices to trade green. Outlook In the intra-day, we expect base metals prices to trade on the positive note on the back of upbeat global market sentiments coupled with weakness in DX. Further, US Federal Reserve decision to continue with its bond buying program will support prices to trade green. Additionally, positive HSBC manufacturing data from China along with expectation of favourable economic data from major global economies will support prices to trade on a positive note. Appreciation in the Indian Rupee will cap sharp gains in the prices on the MCX. Technical Outlook
Unit MCX Copper April’13 MCX Zinc Mar ’13 MCX Lead Mar ’13 MCX Aluminum Mar’13 MCX Nickel Mar ’13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for March 21, 2013 Support 414/411 103.2/102.2 117.5/116.7 103.4/102.7 907/899 Resistance 419/422 104.7/105.5 119/119.8 105/105.8 922/932

(Mar’13) LME Zinc (3 month) MCX Zinc (Mar’13)
Source: Reuters

$/tonne

1935.0

0.8

-2.4

-9.4

-5.3

Rs /kg

103.9

0.4

-2.9

-9.5

1.4

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 20 March 550,825 5,217,425 162,306 1,199,725 271,475
th

19 March 547,025 5,223,325 162,654 1,202,900 274,400

th

Actual Change 3,800 -5,900 -348 -3,175 -2,925

(%) Change 0.7 -0.1 -0.2 -0.3 -1.1
Source: Reuters

Technical Chart – LME Copper

Source: Telequote

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Commodities Daily Report
Thursday| March 21, 2013

International Commodities
Important Events for Today
Indicator FOMC Press Conference Trade Balance HSBC Flash Manufacturing PMI French Flash Manufacturing PMI French Flash Services PMI German Flash Manufacturing PMI German Flash Services PMI Flash Manufacturing PMI Flash Services PMI Retail Sales m/m Public Sector Net Borrowing CBI Industrial Order Expectations Unemployment Claims Flash Manufacturing PMI Existing Home Sales Philly Fed Manufacturing Index Country US Japan China Europe Europe Europe Europe Europe Europe UK UK UK US US US US Time (IST) 12:00am 5:20am 7:15am 1:30pm 1:30pm 2:00pm 2:00pm 2:30pm 2:30pm 3:00pm 3:00pm 3:00pm 6:00pm 6:30pm 7:30pm 7:30pm Actual -1.09T 51.7 Forecast -1.01T 51.2 44.4 44.1 50.8 54.9 48.2 48.2 0.5% 8.4B -16 343K 55.1 5.02M -1.6 Previous -0.68T 50.4 43.9 42.7 50.3 54.1 47.9 47.3 -0.6% -9.9B -14 332K 54.3 4.92M -12.5 Impact High Medium High High Medium High Medium Medium Medium Medium Medium Medium High Medium High High

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