Metals and Currencies Daily Market Watch Sept 11, 2015 - Emkay Commotrade

By  Paul Ploumis 11 Sep 2015  Last updated at  06:37:54 GMT

Macro Headlines

• US jobless claims fell by 6000 to 275000 last week in line with expectations last week, improving sign of labor market and rate hike
• The Bank of England kept its benchmark interest rate unchanged at 0.50% in September and announced no change to its asset purchase facility program at 375 billion pound
• The Chinese yuan strengthened amid speculation that the People's Bank of China was intervening in the offshore markets
• Greek bailout review in October to pave way for debt talks, added to Euro bid
• Index of Industrial production in India expected to show moderate gains at 3.41%, slightly lower than the June’s reading of 3.8%

Currencies

 • USDINR: The Indian rupee trading stronger r from taking clues from Indian equities and dollar index stability ahead of FOMC meet due next week. Today the rupee opened at 66.3400 a dollar as against its previous close of 66.4300. India’s IIP data is likely to show numbers grown at 3.4% in July, compared with a growth of 3.8% a month ago. The rupee is expected to trade cautious ahead of IIP data and Fed rate hike decision. USDINR major support 66.20-66 levels.

 • EURINR: The euro improved against USD above $1.12 levels as Greece elections waiting at the end of this month. Germany Inflation data and Greece bailout review will bring some buying pressure in pair today. Prices are not sustaining on lower side below 74.50-74.30 levels, likely to retest the level of 74.80-75.20

Commodities

 • Base Metals: London LME copper increased more than six weeks high on LME as Glencore this week announced the year's biggest reductions to production and World No. 1 copper producer Codelco was hit by a new round of strikes by contract workers, forcing it to temporarily halt the concentrator at its massive Chuquicamata mine for security reason ns after workers tried to take over the unit. Nickel jumped more than 4% last night as other metals traded flat. Metals got support from the Chinese yuan, which strengthened against the US dollar amid speculation that the People's Bank of China was intervening in the offshore markets, buoyed the local unit further. Today Shanghai warehouse stocks likely to bring trading moves into picture till that we may see the range trading activity in the counters. Copper is expected to trade in the range of 361-368 while Nickel may slide to 885-880 levels. Major focus for the next week will remain on Fed interest rate decision.

Global Economic Events

Precious Metals: Gold prices fell below $1150 levels on COMEX on the release of US jobless claims which remained slightly supportive than the expected figures at 275 K in last week, showing strength of US jobs sector which may put more pressure on Fed to go for immanent liftoff in neat week. Today prices rebounded from a massive sell-off one session earlier amid a sharply weaker dollar, as investors wrestled with the continued uncertainty related to a potential interest rate hike by the Federal Reserve next week. Gold expected to trade in the range of 26000-26500 with huge volatility ahead of Fed rate decision due in next week. Gold will take support at 26000; bounce above 26180 could add rally to towards 26300-500 levels Silver immediate support is at 34800 while upside cap is at 35600 levels.

 Energy: Erasing earlier losses yesterday, Crude oil prices are up in Asian trade today after data showed that U.S. crude oil output fell last week to the lowest level since January. The Energy Information Administration reported that the crude oil output slipped 83,000 barrels a week to 9.14 million last week. However, U.S. stockpiles continued to rise due to lower refinery utilization, an ANZ report says. A glut of oil due to surplus production has weighed on oil prices though prices have risen a little since the last week of August. Saudi believes a summit of oil producing countries' heads of states would fail to produce concrete action toward defending oil prices, sources familiar with the matter said on yesterday. US crude futures lost 14 cents to $45.78 barrel while Brent dropped 5 cents to $48.84 barrel after Saudi comment. Crude immediate support is at 3000-2980 levels, above which prices are sustaining then buying can be done for target of 3050-3100 levels. Natural gas futures gained after data showed that U.S. natural gas supplies rose less than expected last week. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended September 4 rose by 68 billion cubic feet, below expectations for an increase of 75 billion. Gas expected to reside above 181 levels today.

LME Warehouse Updates (in ton)

Trend Watch

Courtesy : Emkay Commotrade

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