[Base Metal]Metals and Currencies Daily Market Watch August 06, 2015 - Emkay Commotrade-Shanghai Metals Market

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[Base Metal]Metals and Currencies Daily Market Watch August 06, 2015 - Emkay Commotrade

Industry News 04:31:24PM Aug 06, 2015 Source:SMM

By Paul Ploumis 06 Aug 2015 Last updated at 04:07:03 GMT

Gold futures slightly retreated for a 10th day in the longest run of losses since 1996 as Goldman Sachs Group Inc. predicted further declines and investors sold more through funds.The metal dropped 6.1 percent as it fell every day since July 9 in New York.

Macro Headlines

• US ADP private sector employment dropped to 185,000 in July compared to 229,000 a month ago, thus fading hopes that the Fed will be in a hurry to hike rates

•The US trade deficit widened to -$43.8B more than expected in June as acceleration in domestic demand in the second quarter and a strong dollar sucked in imports of food and automobiles

•BOE Governor Mark Carney will hold a press conference today after the policy decision has been announced

•Australia’s unemployment rate rose to 6.3% unexpectedly last month from 6% of estimated 

Currencies

• USDINR: The Indian rupee erased its earlier losses against the dollar below Rs.64 levels after disappointing U.S.ADP data and RBI policy decision. Dollar lowered on the release of U.S. ADP private employers hired 185,000 workers in July—below than estimates of 215,000 and lower than the downwardly revised additions of 229,000 for June. ADP is considered as precursor of NFP data thus any other missing figures in the payrolls would limit the more upside on dollar on hope of delaying rate hikes decision from Fed. The rupee closed at 63.75 to a dollar in spot yesterday. USDINR likely to fluctuate in choppy trading in the range of 63.80-64.50 ahead of very crucial US monthly jobs report. 

• EURINR: EURUSD last night managed a mild relief rally after U.S. private payrolls data disappointed but overall prices steadied around 1.09 levels on various mixed sentiments the market have emerged in terms of Fed rate hike anticipation and European data. EURINR expected to trade in range of Rs.69.30-70.20 levels in coming days. 

Commodities

• Base Metals: Base metals on LME traded mixed last night on dollar stability after weak US ADP jobs data and china demand worries. US ADP jobs figures missed the estimates last night and there is growing fears about China's slowing economic growth. Traders worry that contracting manufacturing activity and falling home prices will translate into reduced demand for the metal. Lead and zinc prices are mostly holding steady, shrugging off steep declines in London Metal Exchange. Aluminum prices sank to six-year lows on the London Metal Exchange, some investors said industrial metals were just starting to catch up with the selloff that has sent other commodities prices sharply lower. There would be some risk on rally in the metals ahead of very crucial US jobs report and short covering bets today.

Global Economic Events

Event Country Time (IST) Estimates
Germany Factory OrdersEuro Zone11.30 am0.4%
Retail PMIEuro Zone01.40 pm50.4
BOE monetary meetUK04.30 pmNil
Jobless claimsUS06: 00 pm273K

Precious Metals: Yesterday Gold remained under pressure amid a strong dollar and an anticipated September U.S. rate rise. But later on ADP jobs report posted lower than expected figures and at the same time, a pickup in physical demand from China and India from investors who sought to take advantage of low prices supported the precious metal. Meanwhile, outflows from exchange traded funds that are dominated by western investors continued. Spot gold was trading nearly unchanged at $1085, compared with the opening price of $1084.75. In the earlier trading session yesterday, gold futures traded down amid a stronger dollar, even as muted inflation data for the month of June provided support to dovish arguments for a delayed interest rate hike by the Federal Reserve. Gold is expected to trade in the range of $1070-$1100 with huge volatile sessions ahead of uncertain US jobs report likely to deliver more clues for rate hike from Federal Reserve. Silver expected to take support of 32800 levels.

Energy: Last trading, Crude oil futures lost momentum again and were trading below a psychological threshold in Asia, after briefly staying above the level earlier this week. A stronger dollar was acting as a headwind to crude oil since it is priced in the currency. Though U.S. crude oil stockpiles declined last week, there was a large build-up in finished product stocks. Brent crude rose by 7 cents to $49.66, while Nynex was down by one cent at $45.14. Iran has so far refused to allow United Nations inspectors to interview key scientists and military officers to investigate allegations that Tehran maintained a covert nuclear-weapons program, the head of the U.N.'s nuclear watchdog said in an interview. Iran's stance complicates the International Atomic Energy Agency's probe into Tehran's suspected nuclear-military program--a study that is slated to be completed by mid-December, as required by the landmark nuclear agreement. Crude have taken very good support of $45 and retreated towards $50 levels thus we may see some pullback in the prices on short lived basis but overall outlook remains bearish until prices sustaining above $51.50 levels. US Natural gas futures fell to a three-week low in last week on moderate weather conditions in U.S. Gas prices trading under pressurized manner below Rs.181, likely to take support at Rs.177 on immediate basis.

LME Warehouse Updates (in ton)

MetalsTotal
Inventories
Cancelled
Warrants
(CW)
Change in
Stocks
Change in
CW
CW % of
Total
Inventory
Remarks
Aluminum34140001408350-9250041.25Cancelled warrants in Rotterdam reached to record
Copper350825237753325256.78Stockpiles rise 3.3% to highest since July
Nickel4579261501620-64232.79Stocks reached to record higher levels
Lead21510054975-1375175025.56Stockpiles Climb 29%, Most Since September 2004
Zinc43087579850752518.53Inventories dropped to 7 years low

Trend Watch

MCX Resistance Support Comments
Gold 2490024650A break below 24650 will see prices dip towards 24300/24250.
Silver 3375033300A break below 33300 will open up downside targets of 32800/32500.
Crude oil 29902835Prices will correct further and test support between 2830—2800 levels.
Copper 337330Sideways between 337—330. A daily close below 330 will be negative for copper.
Nickel 710675Negative view until prices stay below 710 levels. Can test 680/675.
Zinc 124120.50Sustenance below 120.50 will see prices correct towards 119 levels.
Lead 111.70109Weakness below 109 will see prices weaken towards 108/107.50levels again.

Courtesy : Emkay Commotrade


Key Words:  base metal 

[Base Metal]Metals and Currencies Daily Market Watch August 06, 2015 - Emkay Commotrade

Industry News 04:31:24PM Aug 06, 2015 Source:SMM

By Paul Ploumis 06 Aug 2015 Last updated at 04:07:03 GMT

Gold futures slightly retreated for a 10th day in the longest run of losses since 1996 as Goldman Sachs Group Inc. predicted further declines and investors sold more through funds.The metal dropped 6.1 percent as it fell every day since July 9 in New York.

Macro Headlines

• US ADP private sector employment dropped to 185,000 in July compared to 229,000 a month ago, thus fading hopes that the Fed will be in a hurry to hike rates

•The US trade deficit widened to -$43.8B more than expected in June as acceleration in domestic demand in the second quarter and a strong dollar sucked in imports of food and automobiles

•BOE Governor Mark Carney will hold a press conference today after the policy decision has been announced

•Australia’s unemployment rate rose to 6.3% unexpectedly last month from 6% of estimated 

Currencies

• USDINR: The Indian rupee erased its earlier losses against the dollar below Rs.64 levels after disappointing U.S.ADP data and RBI policy decision. Dollar lowered on the release of U.S. ADP private employers hired 185,000 workers in July—below than estimates of 215,000 and lower than the downwardly revised additions of 229,000 for June. ADP is considered as precursor of NFP data thus any other missing figures in the payrolls would limit the more upside on dollar on hope of delaying rate hikes decision from Fed. The rupee closed at 63.75 to a dollar in spot yesterday. USDINR likely to fluctuate in choppy trading in the range of 63.80-64.50 ahead of very crucial US monthly jobs report. 

• EURINR: EURUSD last night managed a mild relief rally after U.S. private payrolls data disappointed but overall prices steadied around 1.09 levels on various mixed sentiments the market have emerged in terms of Fed rate hike anticipation and European data. EURINR expected to trade in range of Rs.69.30-70.20 levels in coming days. 

Commodities

• Base Metals: Base metals on LME traded mixed last night on dollar stability after weak US ADP jobs data and china demand worries. US ADP jobs figures missed the estimates last night and there is growing fears about China's slowing economic growth. Traders worry that contracting manufacturing activity and falling home prices will translate into reduced demand for the metal. Lead and zinc prices are mostly holding steady, shrugging off steep declines in London Metal Exchange. Aluminum prices sank to six-year lows on the London Metal Exchange, some investors said industrial metals were just starting to catch up with the selloff that has sent other commodities prices sharply lower. There would be some risk on rally in the metals ahead of very crucial US jobs report and short covering bets today.

Global Economic Events

Event Country Time (IST) Estimates
Germany Factory OrdersEuro Zone11.30 am0.4%
Retail PMIEuro Zone01.40 pm50.4
BOE monetary meetUK04.30 pmNil
Jobless claimsUS06: 00 pm273K

Precious Metals: Yesterday Gold remained under pressure amid a strong dollar and an anticipated September U.S. rate rise. But later on ADP jobs report posted lower than expected figures and at the same time, a pickup in physical demand from China and India from investors who sought to take advantage of low prices supported the precious metal. Meanwhile, outflows from exchange traded funds that are dominated by western investors continued. Spot gold was trading nearly unchanged at $1085, compared with the opening price of $1084.75. In the earlier trading session yesterday, gold futures traded down amid a stronger dollar, even as muted inflation data for the month of June provided support to dovish arguments for a delayed interest rate hike by the Federal Reserve. Gold is expected to trade in the range of $1070-$1100 with huge volatile sessions ahead of uncertain US jobs report likely to deliver more clues for rate hike from Federal Reserve. Silver expected to take support of 32800 levels.

Energy: Last trading, Crude oil futures lost momentum again and were trading below a psychological threshold in Asia, after briefly staying above the level earlier this week. A stronger dollar was acting as a headwind to crude oil since it is priced in the currency. Though U.S. crude oil stockpiles declined last week, there was a large build-up in finished product stocks. Brent crude rose by 7 cents to $49.66, while Nynex was down by one cent at $45.14. Iran has so far refused to allow United Nations inspectors to interview key scientists and military officers to investigate allegations that Tehran maintained a covert nuclear-weapons program, the head of the U.N.'s nuclear watchdog said in an interview. Iran's stance complicates the International Atomic Energy Agency's probe into Tehran's suspected nuclear-military program--a study that is slated to be completed by mid-December, as required by the landmark nuclear agreement. Crude have taken very good support of $45 and retreated towards $50 levels thus we may see some pullback in the prices on short lived basis but overall outlook remains bearish until prices sustaining above $51.50 levels. US Natural gas futures fell to a three-week low in last week on moderate weather conditions in U.S. Gas prices trading under pressurized manner below Rs.181, likely to take support at Rs.177 on immediate basis.

LME Warehouse Updates (in ton)

MetalsTotal
Inventories
Cancelled
Warrants
(CW)
Change in
Stocks
Change in
CW
CW % of
Total
Inventory
Remarks
Aluminum34140001408350-9250041.25Cancelled warrants in Rotterdam reached to record
Copper350825237753325256.78Stockpiles rise 3.3% to highest since July
Nickel4579261501620-64232.79Stocks reached to record higher levels
Lead21510054975-1375175025.56Stockpiles Climb 29%, Most Since September 2004
Zinc43087579850752518.53Inventories dropped to 7 years low

Trend Watch

MCX Resistance Support Comments
Gold 2490024650A break below 24650 will see prices dip towards 24300/24250.
Silver 3375033300A break below 33300 will open up downside targets of 32800/32500.
Crude oil 29902835Prices will correct further and test support between 2830—2800 levels.
Copper 337330Sideways between 337—330. A daily close below 330 will be negative for copper.
Nickel 710675Negative view until prices stay below 710 levels. Can test 680/675.
Zinc 124120.50Sustenance below 120.50 will see prices correct towards 119 levels.
Lead 111.70109Weakness below 109 will see prices weaken towards 108/107.50levels again.

Courtesy : Emkay Commotrade


Key Words:  base metal