Metals and Currencies Daily Market Watch August 13, 2015 - Emkay Commotrade-Shanghai Metals Market

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Metals and Currencies Daily Market Watch August 13, 2015 - Emkay Commotrade

Industry News 03:24:09PM Aug 13, 2015 Source:SMM

By  Paul Ploumis 13 Aug 2015  Last updated at  03:40:32 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

• China's central bank says it is equipped to keep Yuan stable

•The number of people claiming unemployment benefits in the U.K. declined unexpectedly in July, while the country’s jobless rate held steady near six-year lows 

• German yields drop to record as China boosts bonds around world

•China industrial production growth slowed in July and retail sales lowered than the estimates showing weaknesses

•Gold sparked above $1125 amid dollar stability as Fed delaying rate hike, return to safety on China weakness 

Currencies

• USDINR: USDINR The rupee recovered below 64.80 levels against dollar in today's session as most banks sold US dollars on positive cues from the headline inflation rate, which slipped to an eight-month low of 3.78% in July from 5.40% a month ago, due to statistical effect of a high base. The rupee opened at 64.7200 a dollar as against its previous close of 64.7700. Dollar strength eased on delaying rate hikes. USDINR expected to trade in range of 64.60-65 levels tracking domestic equity markets. 

• EURINR: The euro continued its five-day advance posting a high near $1.1191, before retreating to current levels near $1.1182 on optimism of Greece and its creditors came closer to an agreement on a third bailout, spurring a rally in the nation’s bonds. EURINR expected to move higher above 72.50-73 levels.

Commodities

• Base Metals: Base metals continued to fall further yesterday as the surprise devaluation of the yuan by the People's Bank of China reaffirmed fears about the country's economy while making metals more expensive for the world's largest consuming nation. China industrial production and weakening retail sales showed marginal weaknesses into picture. Off late dollar stability on delaying rate hikes from Fed supported the counters like Copper, Lead and zinc. Copper rebounded 0.7%, lead 1.6% and zinc 1.8% whereas aluminum and Nickel closed lower. Nickel plunged to the lowest level since 2008 while copper and aluminum slipped to six-year lows as China’s yuan headed for the biggest two-day drop in two decades. Fears of slowing growth in China has been the main culprit behind the bear market in commodities over the last couple years, from copper and nickel to gold and iron ore. Today there would be some flattish move ahead of US weekly jobs data and dollar stability. Buying on dips still to be avoided as metals will show some risk on rally. Dollar gains against INR may support the counters on MCX.

Event Country Time (IST) Estimates
Germany Final CPI (MoM)Euro Zone11.30 am0.2%
Retail SalesUS06:00 pm10.6%
Unemployment ClaimsUS06.00 pm5.6%
Business InventoriesUS07:30 pm0.3%

Precious Metals: Following the biggest monthly drop in two years, gold has risen almost every day in August. Prices are trading near a three-week high in Asian trade as volatility in equity and currency markets have driven investors towards the relative safety of gold, considered a store of value during turbulence The precious metal has largely sustained a rally sparked by China's surprise devaluation of the yuan earlier this week. Spot gold is trading at $1,125.60/oz, slightly higher than the opening price of $1,125.40/oz and silver rose 0.4% to $15.45 an ounce. Prices for the precious metal have bounced from multiyear lows to stand at their highest level in nearly a month. Gold is expected to trade in range of $1090-$1110 ion daily basis, silver surpassed the level of $15 thus upside cap becomes $15.50.

Energy: Crude oil futures trading flattish as a weaker dollar and lower weekly U.S. crude oil inventories offset weak market sentiment following China's devaluation of the yuan. futures rallied from six-year lows a session earlier amid a weaker dollar, as a continuing draw in weekly stockpiles helped temporarily halt one of the worst routs in more than a decade. In its Weekly stocks report, the U.S. Energy Information Administration (EIA) said U.S. crude inventories for the week ending August 7 fell by 1.7 million barrels, in line with forecasts for a 1.6 million decline. The moderate draw extends sharp declines from a week earlier when U.S. crude stockpiles plunged by 4.4 million barrels in the final week of July. At 453.6 million, crude inventories nationwide remain near its highest level at this time of year in at least 80 years. Moreover, a fall in crude oil inventories is an indication of stronger demand in the U.S. Still, the upside is likely to be limited because of a production overhang. U.S. natural gas prices rose to a three-week high on Wednesday, as forecasts for later this month turned warmer, boosting near-term demand expectations for the heating fuel. As per the earlier forecast, gas until goes below 177 levels buying on dips to be suggested should be continued at current levels. Crude may rebound until 2850-80 levels but selling on higher side still to be done.

LME Warehouse Updates (in ton)

MetalsTotal
Inventories
Cancelled
Warrants
(CW)
Change in
Stocks
Change in
CW
CW % of
Total
Inventory
Remarks
Aluminum-885033706001625136662540.55CW ratio started improving
Copper-49503500000166254.75Stocks falls more than 1.4%
Nickel-2298454410-370214818832.61Stocks hit record high levels
Lead-1252052501004835023.56Cancelled warrant climbed 27% of total stocks
Zinc455046032507082515.39Stockpiles in Antwerp double to highest since Feb 14

Trend Watch

MCX Resistance Support Comments
Gold 2632525700Prices can rally further towards 26325/26400 levels. Dips will find support at 25700.
Silver 3685035500Dips will find support around 35400—35000 levels. Can move higher towards 36800.
Crude oil 28792720Any major upside only above 2900. Until then prices will remain range bound to
negative.
Copper 344.10327Prices can test 344 levels. Buy on dips to 335 levels.
Nickel725670Buy on dips to 685 levels. Sustenance above 700 will see prices rally towards 720.
Zinc 121.25116Prices can advance further towards 121 over the coming sessions.
Lead 115.25111.40Buy on dips to 112. Prices can rally towards 115.25 over the coming sessions.
Natural Gas198.30185Failure to break below 185 on dips will see prices rally towards 198 levels.
USDINR65.3064.70Buy on dips towards 64.90—64.80 levels. Can rally towards 65.30 levels.

Courtesy : Emkay Commotrade


Emkay Commotrade Ltd.

7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. 

India Tel: +91 22 66121212 Fax: +91 22 66121299


 


Metals and Currencies Daily Market Watch August 13, 2015 - Emkay Commotrade

Industry News 03:24:09PM Aug 13, 2015 Source:SMM

By  Paul Ploumis 13 Aug 2015  Last updated at  03:40:32 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

• China's central bank says it is equipped to keep Yuan stable

•The number of people claiming unemployment benefits in the U.K. declined unexpectedly in July, while the country’s jobless rate held steady near six-year lows 

• German yields drop to record as China boosts bonds around world

•China industrial production growth slowed in July and retail sales lowered than the estimates showing weaknesses

•Gold sparked above $1125 amid dollar stability as Fed delaying rate hike, return to safety on China weakness 

Currencies

• USDINR: USDINR The rupee recovered below 64.80 levels against dollar in today's session as most banks sold US dollars on positive cues from the headline inflation rate, which slipped to an eight-month low of 3.78% in July from 5.40% a month ago, due to statistical effect of a high base. The rupee opened at 64.7200 a dollar as against its previous close of 64.7700. Dollar strength eased on delaying rate hikes. USDINR expected to trade in range of 64.60-65 levels tracking domestic equity markets. 

• EURINR: The euro continued its five-day advance posting a high near $1.1191, before retreating to current levels near $1.1182 on optimism of Greece and its creditors came closer to an agreement on a third bailout, spurring a rally in the nation’s bonds. EURINR expected to move higher above 72.50-73 levels.

Commodities

• Base Metals: Base metals continued to fall further yesterday as the surprise devaluation of the yuan by the People's Bank of China reaffirmed fears about the country's economy while making metals more expensive for the world's largest consuming nation. China industrial production and weakening retail sales showed marginal weaknesses into picture. Off late dollar stability on delaying rate hikes from Fed supported the counters like Copper, Lead and zinc. Copper rebounded 0.7%, lead 1.6% and zinc 1.8% whereas aluminum and Nickel closed lower. Nickel plunged to the lowest level since 2008 while copper and aluminum slipped to six-year lows as China’s yuan headed for the biggest two-day drop in two decades. Fears of slowing growth in China has been the main culprit behind the bear market in commodities over the last couple years, from copper and nickel to gold and iron ore. Today there would be some flattish move ahead of US weekly jobs data and dollar stability. Buying on dips still to be avoided as metals will show some risk on rally. Dollar gains against INR may support the counters on MCX.

Event Country Time (IST) Estimates
Germany Final CPI (MoM)Euro Zone11.30 am0.2%
Retail SalesUS06:00 pm10.6%
Unemployment ClaimsUS06.00 pm5.6%
Business InventoriesUS07:30 pm0.3%

Precious Metals: Following the biggest monthly drop in two years, gold has risen almost every day in August. Prices are trading near a three-week high in Asian trade as volatility in equity and currency markets have driven investors towards the relative safety of gold, considered a store of value during turbulence The precious metal has largely sustained a rally sparked by China's surprise devaluation of the yuan earlier this week. Spot gold is trading at $1,125.60/oz, slightly higher than the opening price of $1,125.40/oz and silver rose 0.4% to $15.45 an ounce. Prices for the precious metal have bounced from multiyear lows to stand at their highest level in nearly a month. Gold is expected to trade in range of $1090-$1110 ion daily basis, silver surpassed the level of $15 thus upside cap becomes $15.50.

Energy: Crude oil futures trading flattish as a weaker dollar and lower weekly U.S. crude oil inventories offset weak market sentiment following China's devaluation of the yuan. futures rallied from six-year lows a session earlier amid a weaker dollar, as a continuing draw in weekly stockpiles helped temporarily halt one of the worst routs in more than a decade. In its Weekly stocks report, the U.S. Energy Information Administration (EIA) said U.S. crude inventories for the week ending August 7 fell by 1.7 million barrels, in line with forecasts for a 1.6 million decline. The moderate draw extends sharp declines from a week earlier when U.S. crude stockpiles plunged by 4.4 million barrels in the final week of July. At 453.6 million, crude inventories nationwide remain near its highest level at this time of year in at least 80 years. Moreover, a fall in crude oil inventories is an indication of stronger demand in the U.S. Still, the upside is likely to be limited because of a production overhang. U.S. natural gas prices rose to a three-week high on Wednesday, as forecasts for later this month turned warmer, boosting near-term demand expectations for the heating fuel. As per the earlier forecast, gas until goes below 177 levels buying on dips to be suggested should be continued at current levels. Crude may rebound until 2850-80 levels but selling on higher side still to be done.

LME Warehouse Updates (in ton)

MetalsTotal
Inventories
Cancelled
Warrants
(CW)
Change in
Stocks
Change in
CW
CW % of
Total
Inventory
Remarks
Aluminum-885033706001625136662540.55CW ratio started improving
Copper-49503500000166254.75Stocks falls more than 1.4%
Nickel-2298454410-370214818832.61Stocks hit record high levels
Lead-1252052501004835023.56Cancelled warrant climbed 27% of total stocks
Zinc455046032507082515.39Stockpiles in Antwerp double to highest since Feb 14

Trend Watch

MCX Resistance Support Comments
Gold 2632525700Prices can rally further towards 26325/26400 levels. Dips will find support at 25700.
Silver 3685035500Dips will find support around 35400—35000 levels. Can move higher towards 36800.
Crude oil 28792720Any major upside only above 2900. Until then prices will remain range bound to
negative.
Copper 344.10327Prices can test 344 levels. Buy on dips to 335 levels.
Nickel725670Buy on dips to 685 levels. Sustenance above 700 will see prices rally towards 720.
Zinc 121.25116Prices can advance further towards 121 over the coming sessions.
Lead 115.25111.40Buy on dips to 112. Prices can rally towards 115.25 over the coming sessions.
Natural Gas198.30185Failure to break below 185 on dips will see prices rally towards 198 levels.
USDINR65.3064.70Buy on dips towards 64.90—64.80 levels. Can rally towards 65.30 levels.

Courtesy : Emkay Commotrade


Emkay Commotrade Ltd.

7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. 

India Tel: +91 22 66121212 Fax: +91 22 66121299