Metals and Currencies Daily Market Watch August 25, 2015 - Emkay Commotrade-Shanghai Metals Market

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Metals and Currencies Daily Market Watch August 25, 2015 - Emkay Commotrade

Industry News 05:34:51PM Aug 25, 2015 Source:SMM

By   25 Aug 2015  Last updated at  05:59:43 GMT

Macro Headlines

•Slump of 9% in China shares sent global stocks, commodities indexes highly volatile and sliding into correction territory

•People's Bank of China injects 150 Bln Yuan into financial system as yuan intervention drained funds

•Federal Reserve Bank of Atlanta President Dennis Lockhart says planned rate hike complicated by China

•The Chicago Fed national activity index rose to 0.34 from the more-than-expected of 0.20 last month

•Crude oil prices dropped around 60% since the beginning of the year while gold sparked to seven weeks high on safe heaven bid

•Greek conservative opposition gives up bid to form government, Elections due on Sept, 20

Currencies

• USDINR: The rupee was up against the US dollar in choppy trade tracking the rise in the local share market, falling global dollar on expectations of delaying rate hikes from Fed this time. Today, the rupee opened at 66.5500 a dollar, as against its previous close of 66.6400. Seconds after opening, the rupee rose to 66.4400 a dollar with a jerk, as some private and foreign banks cut their long position on the greenback. The dollar index is also trading down 0.50% at 93.50. Sharp outflow of FII from domestic markets and weak sentiments in the globe pressurizing rupee to sustain on higher side but there would be some correction as dollar falling ahead of delaying fed rate decision. Upside limit is at Rs.67.20 in spot market.

• EURINR: The euro is trading up 1.6% at $1.1560 as the greenback suffered from waning expectations of a Fed rate hike in September and unwinding of euro-funding carry trade. Euro rebounded very sharply along with other pairs like yen and GBP against INR yesterday. EURINR expected to rebound to 77-77.50 levels in near term.

Commodities

• Base Metals: Base metals had hit a six-year low amid deepening concern over a slowdown in the world's second largest economy, China. Despite the fall in US dollar metals went to slide into oversold zone. On LME, aluminum fell 1%, Copper fell 2%, Zinc 2.5%, lead 3% and Nickel fell sharply by 6.5% which emerged from China step for yuan devaluation to contraction of PMI released on Friday. Today there will be some corrections or stable range trading expected on China stimulus but overall weakness still remains until any other intrinsic fundamental trigger comes.

Global Economic Events

Event

Country

Time (IST)

Estimates

German Final GDP (QoQ)Euro Zone11.30 am0.4%
German IFO business climateEuro zone01.30 pm107.6
HPI (MoM)US0 6 . 3 0 p m0.4%
New Home SalesUS07.30 pm512K

 

 Precious Metals: Gold prices rose closing at their highest level in seven weeks, as some investors sought to shield their wealth from turbulence in global stocks and currency markets on China concerns. The most actively traded contract, for December delivery, rose $6.40, or 0.6%, to settle at $1,159.60 a troy ounce on the Comex division of the New York Mercantile Exchange. That was the highest close since July 2. Investors often buy gold in times of political and economic uncertainty in the belief it will keep its value better than such assets as stocks, bonds and currencies. Federal Reserve Bank of Atlanta President Dennis Lockhart is to speak; his comments will be closely watched tonight. Spot gold rose trading up 0.15% to $1161.30 a troy ounce and silver rose 0.16% to $15.35 troy ounce. As per the expectations we have initiated long call in gold likely to be continued for the target of 27500 again, COMEX upside limit is at $1200 for this week. Dollar strength against INR is giving good support to the prices.

 

 Energy: Crude oil prices hit more than six years low in US falling more than 60% from the start of year on oversupply concerns, sluggish demand and dollar strength. WTI reached below $40 after long consolidations at $38.50 levels last night. Sharp selling witnessed majorly due to China slowdown after yuan devaluation and weak PMI manufacturing added more weakness and its stock market. 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. Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by OPEC last year not to cut production. Though there will be some rebound in the prices on China stimulus or technical correction after massive fall but overall weaknesses still remains until prices goes above 2800 levels or $41.50 in coming days. Selling on rise is still to be suggested. Gas prices are likely to fluctuate in between the range of Rs.175-181 levels on moderate weather conditions in US.

LME Warehouse Updates (in ton)

MetalsTotal
Inventories
Cancelled
Warrants
(CW)
Change in
Stocks
Change in
CW
CW % of
Total
Inventory
Remarks
Aluminum-857533121500129670039.15CW ratio started improving
Copper2375356200104505280014.82Canceled warrants jump 36% to highest since July 14
Nickel60455052-24615665434.43Stocks have fallen very sharply from highest levels in
record
Lead-20751926502004725024.53Cancelled warrants 26% in the last week
Zinc1730052275007607514.55Stockpiles in Antwerp double to highest since Feb 14 

Trend Watch

MCXResistanceSupportComments
Gold2785027050A dip towards 27100 is likely. Upside resistance around 27800-850.
Silver3675034450Prices can test support around 34450. Sell on rise.
Crude oil27602577Failure to sustain above 2700 will see prices weaken towards 2577 again.
Copper342.50326Sideways in a broad range.
Nickel670600Negative until prices stay below 670 on closing basis.
Zinc117113.40Fresh downside only below 113.40. Until then prices will remain range bound.
Lead115107.30Strong supports around 107.50 levels. Upside resistance 115.
Natural Gas185.50174Sideways between 185—174. A daily close below 174 will be negative.
USDINR67.4066.20The momentum can take prices higher towards 67.40 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 25, 2015 - Emkay Commotrade

Industry News 05:34:51PM Aug 25, 2015 Source:SMM

By   25 Aug 2015  Last updated at  05:59:43 GMT

Macro Headlines

•Slump of 9% in China shares sent global stocks, commodities indexes highly volatile and sliding into correction territory

•People's Bank of China injects 150 Bln Yuan into financial system as yuan intervention drained funds

•Federal Reserve Bank of Atlanta President Dennis Lockhart says planned rate hike complicated by China

•The Chicago Fed national activity index rose to 0.34 from the more-than-expected of 0.20 last month

•Crude oil prices dropped around 60% since the beginning of the year while gold sparked to seven weeks high on safe heaven bid

•Greek conservative opposition gives up bid to form government, Elections due on Sept, 20

Currencies

• USDINR: The rupee was up against the US dollar in choppy trade tracking the rise in the local share market, falling global dollar on expectations of delaying rate hikes from Fed this time. Today, the rupee opened at 66.5500 a dollar, as against its previous close of 66.6400. Seconds after opening, the rupee rose to 66.4400 a dollar with a jerk, as some private and foreign banks cut their long position on the greenback. The dollar index is also trading down 0.50% at 93.50. Sharp outflow of FII from domestic markets and weak sentiments in the globe pressurizing rupee to sustain on higher side but there would be some correction as dollar falling ahead of delaying fed rate decision. Upside limit is at Rs.67.20 in spot market.

• EURINR: The euro is trading up 1.6% at $1.1560 as the greenback suffered from waning expectations of a Fed rate hike in September and unwinding of euro-funding carry trade. Euro rebounded very sharply along with other pairs like yen and GBP against INR yesterday. EURINR expected to rebound to 77-77.50 levels in near term.

Commodities

• Base Metals: Base metals had hit a six-year low amid deepening concern over a slowdown in the world's second largest economy, China. Despite the fall in US dollar metals went to slide into oversold zone. On LME, aluminum fell 1%, Copper fell 2%, Zinc 2.5%, lead 3% and Nickel fell sharply by 6.5% which emerged from China step for yuan devaluation to contraction of PMI released on Friday. Today there will be some corrections or stable range trading expected on China stimulus but overall weakness still remains until any other intrinsic fundamental trigger comes.

Global Economic Events

Event

Country

Time (IST)

Estimates

German Final GDP (QoQ)Euro Zone11.30 am0.4%
German IFO business climateEuro zone01.30 pm107.6
HPI (MoM)US0 6 . 3 0 p m0.4%
New Home SalesUS07.30 pm512K

 

 Precious Metals: Gold prices rose closing at their highest level in seven weeks, as some investors sought to shield their wealth from turbulence in global stocks and currency markets on China concerns. The most actively traded contract, for December delivery, rose $6.40, or 0.6%, to settle at $1,159.60 a troy ounce on the Comex division of the New York Mercantile Exchange. That was the highest close since July 2. Investors often buy gold in times of political and economic uncertainty in the belief it will keep its value better than such assets as stocks, bonds and currencies. Federal Reserve Bank of Atlanta President Dennis Lockhart is to speak; his comments will be closely watched tonight. Spot gold rose trading up 0.15% to $1161.30 a troy ounce and silver rose 0.16% to $15.35 troy ounce. As per the expectations we have initiated long call in gold likely to be continued for the target of 27500 again, COMEX upside limit is at $1200 for this week. Dollar strength against INR is giving good support to the prices.

 

 Energy: Crude oil prices hit more than six years low in US falling more than 60% from the start of year on oversupply concerns, sluggish demand and dollar strength. WTI reached below $40 after long consolidations at $38.50 levels last night. Sharp selling witnessed majorly due to China slowdown after yuan devaluation and weak PMI manufacturing added more weakness and its stock market. 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. Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by OPEC last year not to cut production. Though there will be some rebound in the prices on China stimulus or technical correction after massive fall but overall weaknesses still remains until prices goes above 2800 levels or $41.50 in coming days. Selling on rise is still to be suggested. Gas prices are likely to fluctuate in between the range of Rs.175-181 levels on moderate weather conditions in US.

LME Warehouse Updates (in ton)

MetalsTotal
Inventories
Cancelled
Warrants
(CW)
Change in
Stocks
Change in
CW
CW % of
Total
Inventory
Remarks
Aluminum-857533121500129670039.15CW ratio started improving
Copper2375356200104505280014.82Canceled warrants jump 36% to highest since July 14
Nickel60455052-24615665434.43Stocks have fallen very sharply from highest levels in
record
Lead-20751926502004725024.53Cancelled warrants 26% in the last week
Zinc1730052275007607514.55Stockpiles in Antwerp double to highest since Feb 14 

Trend Watch

MCXResistanceSupportComments
Gold2785027050A dip towards 27100 is likely. Upside resistance around 27800-850.
Silver3675034450Prices can test support around 34450. Sell on rise.
Crude oil27602577Failure to sustain above 2700 will see prices weaken towards 2577 again.
Copper342.50326Sideways in a broad range.
Nickel670600Negative until prices stay below 670 on closing basis.
Zinc117113.40Fresh downside only below 113.40. Until then prices will remain range bound.
Lead115107.30Strong supports around 107.50 levels. Upside resistance 115.
Natural Gas185.50174Sideways between 185—174. A daily close below 174 will be negative.
USDINR67.4066.20The momentum can take prices higher towards 67.40 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