Metals and Currencies Daily Market Watch August 20, 2015 - Emkay Commotrade-Shanghai Metals Market

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Metals and Currencies Daily Market Watch August 20, 2015 - Emkay Commotrade

Industry News 06:55:40PM Aug 20, 2015 Source:SMM

By   20 Aug 2015  Last updated at  04:00:44 GMT

Macro Headlines

•FOMC minutes highlighted the concern over the state of the global economy, driving markets to question the likelihood that the Fed will raise rates next month

•China's central bank injected the largest amount of cash into the financial system to support growth

•Euro zone trade surplus rises to 25.4B at six months high in June as exports rises more than the imported figures

•China's yuan fell after the IMF dealt a setback to the currency's role on the global stage, breaking a streak of stability earlier this week 

• Germany approves third Greece bailout package to formalize funds

Currencies

• USDINR: Indian rupee opened down as July FOMC minutes showed that members expressed concerns about lagging inflation as well as the risks posed by a stronger dollar and developments in China. Dollar fell back to 96.50 levels after FOMC meeting minutes. USDINR expected to move higher towards 66 only if prices likely to surpass the level of 65.50 in coming days. Buying on dips still is done until prices goes below 64.50 levels in spot market for near term.

• EURINR: The euro rebounded above $1.10 levels yesterday as German lawmakers ratified a proposal from the euro zone on Wednesday to grant Greece a third credit package. EURUSD trading up by more than 2.65% while EURINR is also up by more than 1%. As expected earlier, EURINR in spot market is likely to continue trade above 72.80-73 levels in coming days.

Commodities

• Base Metals: In Base metals, copper fell for a fifth straight session in London, reaching a six-year low, on signs that the market is oversupplied. Production outstripped demand by 151,000 metric tons in the six months through June, the World Bureau of Metal Statistics. Lead and zinc scrap prices are buckling under the weight of lower London Metal Exchange prices, with tags inching down amid generally steady demand. Aluminum steadied while Nickel also extended its selling more than 1% along with Copper yesterday. Off late on decline in dollar on the release of dovish FOMC minutes supported metal from falling further. Almost all the metals other than copper increased more than 1%. Today china central bank injected the largest amount of cash into the financial system since mid-February this week., but metals trading under pressure on yuan weakness Copper major support at 327-325 while Nickel at 660, aluminum unlikely to fall below 98.50 while Zinc and lead may show some short lived gains but overall weakness still remains.

Global Economic Events

Event Country Time (IST) Estimates
Germany PPI (MoM)Euro Zone11.30 am-0.1%
Retail SalesUK02.00pm0.4%
Jobless ClaimsUS06.00 pm272K
Existing home salesUS07:30 pm5.45M

Precious Metals: Bullions prices rose to a near five week-high in Asia trade, as Fed have reduced the hop of earlier rate hikes in US looking to current economic grounds n the economy. The minutes of a Federal Reserve meeting adopted a cautious tone on the possible timing of a rise in U.S. interest rates. Overall Fed comment as expected earlier remained dovish for dollar and costive for gold. Gold also benefited from China monetary stimulus today. Spot gold rose to an intra-day high of $1,139.50/oz, a level seen last July 17. It is now trading at $1,138.35/oz. As per the earlier forecast buying on dips for the target of 26600-800 levels can be done until prices well sustaining above 25800 on MCX. Gold have surpassed the level of $1135 on COMEX which may find resistance of $1150 and silver at $15.50 levels.

Energy: Crude oil prices extended its sharp selling to more than six-year low after inventory data showed a surprise increase in U.S. stockpiles, adding to the glut of crude around the globe. The downbeat tone for stocks around the globe started in China, where shares spent most of the session in negative territory before a late-day turnaround. The U.S. Energy Information (EIA) said in its Weekly Petroleum Status Report that U.S. crude stockpiles increased by 2.6 million for the week ending on August 14, marking its highest weekly build since April. At 456.2 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Fed dovish comment initially supported the prices initially on dollar stability but later on prices pressurized on weak fundamental grounds. Crude just like done earlier taking good support of $40, break below this could lead for sharp selling of $38-37 levels in near term. On mild weather conditions and ahead of EIA stocks report gas expected to trade under pressure. Its expected to trade in the range of Rs.177-Rs181 levels until data comes. Crude selling is still to be suggested with stop loss above 2850.

LME Warehouse Updates (in ton)

MetalsTotal
Inventories
Cancelled
Warrants
(CW)
Change in
Stocks
Change in
CW
CW % of
Total
Inventory
Remarks
Aluminum265033382250132082539.57CW ratio started improving
Copper600354200875273007.71Stocks falls more than 1.4%
Nickel1194456168175215237033.4Stocks fallen very sharply from highest levels in record
Lead-26501987759004097520.61Cancelled warrants 3.8% in last week
Zinc575503475100507762515.42Stockpiles in Antwerp double to highest since Feb 14

Trend Watch

MCX Resistance Support Comments
Gold 2642525900Positive until prices hold on above 25900. Buy on dips.
Silver 3600034800Above 36000 counter will re-test 36250/36290 levels.
Crude oil 28102620Prices should slide lower towards 2610. Sell on rise.
Copper 331.50327Sustenance below 327 will be bearish for copper.
Nickel695670Failure to break below 670 will see prices rebound towards 700 levels.
Zinc 118.50113.40Negative until prices stay below 118.
Lead 112108Pullbacks will face selling around 111.60—112. Prices can dip towards 108 levels.
Natural Gas180.80174Reversal only above 181. Until then prices will slip towards 174 levels.
USDINR65.7065.10Sideways between 65.60—65.10 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

 

Key Words:  MCX Gold  Currencies  MCX Trading Tips 

Metals and Currencies Daily Market Watch August 20, 2015 - Emkay Commotrade

Industry News 06:55:40PM Aug 20, 2015 Source:SMM

By   20 Aug 2015  Last updated at  04:00:44 GMT

Macro Headlines

•FOMC minutes highlighted the concern over the state of the global economy, driving markets to question the likelihood that the Fed will raise rates next month

•China's central bank injected the largest amount of cash into the financial system to support growth

•Euro zone trade surplus rises to 25.4B at six months high in June as exports rises more than the imported figures

•China's yuan fell after the IMF dealt a setback to the currency's role on the global stage, breaking a streak of stability earlier this week 

• Germany approves third Greece bailout package to formalize funds

Currencies

• USDINR: Indian rupee opened down as July FOMC minutes showed that members expressed concerns about lagging inflation as well as the risks posed by a stronger dollar and developments in China. Dollar fell back to 96.50 levels after FOMC meeting minutes. USDINR expected to move higher towards 66 only if prices likely to surpass the level of 65.50 in coming days. Buying on dips still is done until prices goes below 64.50 levels in spot market for near term.

• EURINR: The euro rebounded above $1.10 levels yesterday as German lawmakers ratified a proposal from the euro zone on Wednesday to grant Greece a third credit package. EURUSD trading up by more than 2.65% while EURINR is also up by more than 1%. As expected earlier, EURINR in spot market is likely to continue trade above 72.80-73 levels in coming days.

Commodities

• Base Metals: In Base metals, copper fell for a fifth straight session in London, reaching a six-year low, on signs that the market is oversupplied. Production outstripped demand by 151,000 metric tons in the six months through June, the World Bureau of Metal Statistics. Lead and zinc scrap prices are buckling under the weight of lower London Metal Exchange prices, with tags inching down amid generally steady demand. Aluminum steadied while Nickel also extended its selling more than 1% along with Copper yesterday. Off late on decline in dollar on the release of dovish FOMC minutes supported metal from falling further. Almost all the metals other than copper increased more than 1%. Today china central bank injected the largest amount of cash into the financial system since mid-February this week., but metals trading under pressure on yuan weakness Copper major support at 327-325 while Nickel at 660, aluminum unlikely to fall below 98.50 while Zinc and lead may show some short lived gains but overall weakness still remains.

Global Economic Events

Event Country Time (IST) Estimates
Germany PPI (MoM)Euro Zone11.30 am-0.1%
Retail SalesUK02.00pm0.4%
Jobless ClaimsUS06.00 pm272K
Existing home salesUS07:30 pm5.45M

Precious Metals: Bullions prices rose to a near five week-high in Asia trade, as Fed have reduced the hop of earlier rate hikes in US looking to current economic grounds n the economy. The minutes of a Federal Reserve meeting adopted a cautious tone on the possible timing of a rise in U.S. interest rates. Overall Fed comment as expected earlier remained dovish for dollar and costive for gold. Gold also benefited from China monetary stimulus today. Spot gold rose to an intra-day high of $1,139.50/oz, a level seen last July 17. It is now trading at $1,138.35/oz. As per the earlier forecast buying on dips for the target of 26600-800 levels can be done until prices well sustaining above 25800 on MCX. Gold have surpassed the level of $1135 on COMEX which may find resistance of $1150 and silver at $15.50 levels.

Energy: Crude oil prices extended its sharp selling to more than six-year low after inventory data showed a surprise increase in U.S. stockpiles, adding to the glut of crude around the globe. The downbeat tone for stocks around the globe started in China, where shares spent most of the session in negative territory before a late-day turnaround. The U.S. Energy Information (EIA) said in its Weekly Petroleum Status Report that U.S. crude stockpiles increased by 2.6 million for the week ending on August 14, marking its highest weekly build since April. At 456.2 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Fed dovish comment initially supported the prices initially on dollar stability but later on prices pressurized on weak fundamental grounds. Crude just like done earlier taking good support of $40, break below this could lead for sharp selling of $38-37 levels in near term. On mild weather conditions and ahead of EIA stocks report gas expected to trade under pressure. Its expected to trade in the range of Rs.177-Rs181 levels until data comes. Crude selling is still to be suggested with stop loss above 2850.

LME Warehouse Updates (in ton)

MetalsTotal
Inventories
Cancelled
Warrants
(CW)
Change in
Stocks
Change in
CW
CW % of
Total
Inventory
Remarks
Aluminum265033382250132082539.57CW ratio started improving
Copper600354200875273007.71Stocks falls more than 1.4%
Nickel1194456168175215237033.4Stocks fallen very sharply from highest levels in record
Lead-26501987759004097520.61Cancelled warrants 3.8% in last week
Zinc575503475100507762515.42Stockpiles in Antwerp double to highest since Feb 14

Trend Watch

MCX Resistance Support Comments
Gold 2642525900Positive until prices hold on above 25900. Buy on dips.
Silver 3600034800Above 36000 counter will re-test 36250/36290 levels.
Crude oil 28102620Prices should slide lower towards 2610. Sell on rise.
Copper 331.50327Sustenance below 327 will be bearish for copper.
Nickel695670Failure to break below 670 will see prices rebound towards 700 levels.
Zinc 118.50113.40Negative until prices stay below 118.
Lead 112108Pullbacks will face selling around 111.60—112. Prices can dip towards 108 levels.
Natural Gas180.80174Reversal only above 181. Until then prices will slip towards 174 levels.
USDINR65.7065.10Sideways between 65.60—65.10 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

 

Key Words:  MCX Gold  Currencies  MCX Trading Tips