Commodities Daily Report
Thursday, May 19, 2016
International Commodities
Content
Overview
Precious Metals
Energy
Base Metals
Important Events for today
Research Team
Prathamesh Mallya
Sr. Research Analyst (Non-Agro Commodities & Currency)
prathamesh.mallya@angelbroking.com
(022) 2921 2000 Extn :6134
Kaynat Chainwala
Research Analyst
kaynat.chainwala@angelbroking.com
(022) 2921 2000 Extn :6136
Angel Commodities Broking Pvt. Ltd.
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Commodities Daily Report
Thursday, May 19, 2016
International Commodities
Overview
 Britain’s Average Earnings Index rose to 2.0 percent in Apr’16
 Euro area’s CPI remained unchanged at -0.2 percent in Apr’16
Asian markets are trading in red after the release of strong CPI data from
the US along with the hawkish tone in yesterday’s FOMC meeting
minutes which has revived rate hike expectations in the forth coming
June FOMC meeting. This has acted as a negative factor for the emerging
markets.
The US Dollar Index surged by 0.6 percent in yesterday’s session after the
release of FOMC meeting minutes which showed that the Federal
Reserve policy makers could opt for a June interest-rate hike provided
the economy warrants that.
There has been a series of mixed data releases from the nation which has
kept the markets confused about the US economy. The NFP and ADP
employment data came on a negative note. However, the recently
released inflation data has shown some ray of hope to the investors. Cost
of living rose the most in Apr’16 since the last three years.
US Dollar Index made an intraday high of 95.23 and closed at 95.06 on
Wednesday.
The Indian Rupee depreciated by 0.5 percent yesterday led by outflows
of funds in the domestic market amid negative sentiments in the global
markets. Moreover, fresh buying of the American currency by importers
and banks amid stronger dollar in the overseas market dragged the rupee
further lower.
Market Highlights (% change)
Last
Prev day
as on May 18, 2016
w-o-w
m-o-m
y-o-y
INR/$
(Spot)
67.1
-0.47
-0.9
-1.5
-5.0
$/Euro
(Spot)
1.1
-0.85
-1.8
-1.2
0.6
Dollar
Index
95.1
0.6
1.4
0.6
19.6
NIFTY*
7870.2
-0.26
0.3
#N/A
-6.0
SENSEX*
25704.6
-0.27
0.4
#N/A
40.5
DJIA
17526.6
-0.02
-1.0
-2.5
-4.1
2047.6
0.0
-0.8
-0.6
-2.8
S&P
Source: Reuters
Supply glut creates a cautious sentiments in China
Domestic markets i.e. Sensex and Nifty ended on a negative note owing
to negative sentiments seen in the Asian markets after the release of
strong inflation and hawkish FOMC meeting minutes which has boosted
prospects of an interest rate hike by the Federal Reserve.
Most Chinese commodities futures fell on Thursday, amid
cautious sentiment caused by a supply glut for some industrial
metals and a possible U.S. interest rate hike.
Indian Rupee made an intraday low of 67.15 and closed at 67.13 on
Wednesday.
Some traders are concerned that China's own interest rate
easing cycle could be over, limiting the prospects for the
world's No. 2 economy and prompting investors to become
bearish on commodities amid concerns on demand recovery.
News & developments
Rate hike in the US very much possible
Federal Reserve officials felt the U.S. economy could be ready for
another interest rate increase in June, according to the minutes from the
central bank's April policy meeting released on Wednesday.
Chinese steel and iron ore futures dropped by more than 2
percent, as demand is faltering seasonally. However, steel mills
are still picking up production because of rising prices earlier
this year, worsening a supply glut that led to accusations China
is dumping low-price steel onto global markets. (Reuters)
Most participants in the policy-setting committee's April 26-27 meeting
said they wanted to see signs that economic growth was picking up in the
second quarter and that employment and inflation were firming, the
minutes showed. (Reuters)
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Commodities Daily Report
Thursday, May 19, 2016
International Commodities
Bullion
Gold
ON Wednesday, spot gold prices declined by 1.7 percent to close at
$1257.9 per ounce s the dollar hit a new three-week high following
minutes of the U.S. Federal Reserve's last policy meeting that bolstered
expectations that the central bank could soon raise interest rates.
The U.S. central bank will likely raise interest rates next month if economic
data points to stronger second-quarter growth as well as firming inflation
and employment, according to minutes from the U.S. central bank's April
policy meeting.
The indications followed a Fed policymaker's comment on Tuesday he
would push for an interest rate hike in June or July, and two other Fed
officials, who predicted up to three rate increases this year.
Market Highlights - Gold (% change)
as on May 18, 2016
Gold
Unit
Last
Prev.
day
WoW
Gold
(Spot)
$/oz
1257.9
-1.70
Gold (Spot
-Mumbai)
Rs/10
gms
29925.0
Comex
Gold
$/oz
MCX Gold
(Jun’16)
Rs /10
gms
MoM
YoY
-1.5
0.6
4.2
0.08
0.1
#N/A
9.2
1273.7
-0.20
-0.1
2.0
3.7
30055.0
0.02
0.4
2.5
10.1
Source: Reuters
On the MCX, gold prices rose marginally by 0.02 percent to close at
Rs.30055 per 10 gms.
Market Highlights - Silver (% change)
Silver
Silver
Spot silver prices declined by 2.3 percent on Wednesday to close at $16.8
per ounce in line with decline in gold prices. Weak base metals pack also
exerted downside pressure on silver.
ON the MCX, silver prices declined by 0.32 percent to close at Rs.41048
per kg.
Unit
as on May 18, 2016
Last
Prev day
WoW
MoM
YoY
Silver
(Spot)
$/oz
16.8
-2.3
-3.2
-0.6
-1.2
Silver
(Spot Mumbai)
Comex
Silver
Rs/1
kg
41150.0
-0.2
-0.8
#N/A
2.6
$/ oz
17.1
-0.7
0.2
1.3
0.2
MCX Silver
(May’16)
Rs / kg
41048.0
-0.32
-0.5
3.3
4.5
Source: Reuters
Outlook
Technical Chart – Spot Gold
The minutes of the US Federal Reserve released last night stated that the
central bank will likely raise interest rates if economic data points to
stronger second quarter growth while inflation and firm employment
numbers will be a close watch by investors.
On the MCX, gold prices are expected to trade lower today.
Technical Outlook
valid for May 19, 2016
Unit
Spot Gold
MCX Gold Jun’16
MCX Silver May’16
NCDEX Silver hedge June’16
Resistance
1252/1243
1262/1266
29900/29700
30150/30250
27360/27170
27590/27680
$/oz
16.70/16.50
17.00/17.20
Rs/kg
40700/40300
41500/41900
37040/36640
37840/38240
$/oz
Rs/10 gms
NCDEX Gold hedge May’16
Spot Silver
Support
Source: Reuters
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37
Commodities Daily Report
Thursday, May 19, 2016
International Commodities
Energy
Crude Oil
Market Highlights - Crude Oil (% change)
Unit
Last
Prev.
day
WoW
MoM
YoY
Brent
(Spot)
$/bbl
49.3
0.4
7.2
14.5
-21.9
Nymex
Crude
(May’16)
ICE Brent
Crude
(May’16)
$/bbl
48.2
-0.2
4.2
17.3
-15.8
$/bbl
48.9
-0.7
2.8
11.1
-23.6
Rs/bbl
3320.0
1.6
5.7
18.0
-12.6
Crude Oil
WTI oil prices declined by 0.2 percent on Wednesday to close at $48.2
per barrel as oil prices retreated from 2016 highs and snapped a twoday rally on Wednesday, hurt by a surge in the dollar after the U.S.
Federal Reserve signaled it could raise interest rates next month.
The minutes showed the central bank was likely to raise rates in June if
economic data pointed to stronger second-quarter growth and firmer
inflation and employment.
as on May 18, 2016
MCX Crude
(May’16)
Source: Reuters
On the MCX, oil prices rose by 1.9 percent to close at Rs.3268 per barrel.
Market Highlights - Natural Gas (% change)
as on May 17, 2016
EIA inventory update
Crude inventories rose 1.3 million barrels in the week to May 13.
Gasoline stocks fell 2.5 million barrels. Distillate stockpiles, which
include diesel and heating oil, fell 3.2 million barrels.
Natural
Gas (NG)
Nymex
NG
MCX NG
(May’16)
Outlook
Unit
Last
Prev. day
WoW
MoM
YoY
$/mmbtu
2.13
-2.74
-7.03
-2.61
-29.06
Rs/
mmbtu
134.5
-2.11
-7.05
-1.90
-29.10
Source: Reuters
On an intraday basis, we expect oil prices to trade lower as international
markets are down by around 1.3 percent while global glut of inventories
is creating bearish sentiments in oil markets.
Technical Chart – NYMEX Crude Oil
ON the MCX, oil prices are expected to trade lower today.
Technical Outlook
valid for May 19, 2016
Unit
Support
Resistance
$/bbl
46.70/45.90
48.15/49.00
MCX Crude May’16
Rs/bbl
3210/3140
3310/3370
NCDEX Crude May’16
Rs/bbl
3310/3260
3410/3470
NYMEX Crude Oil
Technical Chart – NYMEX Natural Gas
Source: Reuters
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Commodities Daily Report
Thursday, May 19, 2016
International Commodities
Base Metals
Market Highlights - Base Metals (% change)
Base metals on the LME traded lower as various Federal Reserve Bank
members called a June interest-rate a possibility.
The minutes showed the central bank was likely to raise rates in June
if economic data pointed to stronger second-quarter growth and
firmer inflation and employment.
Unit
LME Copper (3
Prev. day
MoM
YoY
-2.0
-22.9
-25.8
-0.1
-0.4
-17.2
-22.7
1555.0
0.8
-0.6
-12.7
-13.3
Rs /kg
104.3
1.1
0.2
-6.2
-7.5
$/tonne
8650.0
-1.1
-2.0
-33.5
-33.2
Rs /kg
581.0
-1.1
-1.6
-28.1
-30.1
$/tonne
1702.5
-0.9
-3.9
-9.4
-12.5
Rs /kg
115.2
-0.5
-2.9
-2.0
-7.7
$/tonne
1892.0
-0.4
-0.8
-11.2
-15.3
Rs /kg
126.4
-0.1
-0.4
-4.6
-11.4
$/tonne
4612.5
-1.0
Rs/kg
311.1
$/tonne
WoW
month)
MCX Copper
(May’16)
LME Aluminum
On the MCX, base metals traded lower in line with international
trends.
Last
as on May 18, 2016
(3 month)
MCX Aluminum
(May’16)
Copper
LME Nickel
LME Copper prices declined by 1 percent on Wednesday to close at
$4612.5 per tonne Copper slid to its lowest in three months,
pressured by the dollar which rose on renewed expectations of
further U.S. interest rate hikes.
(3 month)
MCX Nickel
(May’16)
LME Lead
(3 month)
Other industrial metals also joined the downdraft as copper reversed
lower after three days of gains.
The dollar climbed to a three-week peak against a basket of
currencies, which makes paying for dollar-denominated metals with
other currencies more expensive, after comments from Federal
Reserve officials left open the potential for several rate increases this
year.
MCX copper prices fell by 0.1 percent yesterday to close at Rs.311.1
per kg.
MCX Lead
(May’16)
LME Zinc
(3 month)
MCX Zinc
(May’16)
Source: Reuters
LME Inventories in tonnes
16th May
Copper
Outlook
We expect copper prices to trade lower as international markets are
trading lower by half a percent. Besides, slow growth in China has
continuously bothered investors sentiments in turn exerting downside
pressure on copper.
We expect MCX Copper prices to trade lower today.
13th May
Actual
Change
(%)
Change
156850
156750
100
0.06%
2571125
2575725
-4600
-0.18%
Nickel
404178
405858
-1680
-0.41%
Zinc
388475
389475
-1000
-0.26%
Lead
180450
175650
4800
2.73%
Aluminum
Source: Reuters
Technical Outlook
valid for May 19, 2016
Unit
Support
Resistance
MCX Copper June’16
Rs /kg
308/305
314/317
MCX Zinc May’16
Rs /kg
125.50/124.50
127.50/128.50
MCX Lead May’16
Rs /kg
113.50/112.50
115.50/116.50
MCX Aluminum May’16
Rs /kg
103.50/102.50
105.50/106.50
MCX Nickel May’16
Rs /kg
573/565
589/598
Technical Chart – LME Copper
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Source: Reuters
Commodities Daily Report
Thursday, May 19, 2016
International Commodities
Economic indicators to be released on May 19, 2016
Indicator
Country
Time (IST)
Actual
Forecast
Previous
Impact
MPC Member Haldane Speaks
UK
12:30am
-
-
-
Medium
Retail Sales m/m
UK
2:00pm
-
0.6%
-1.3%
High
Euro
5:00pm
-
-
-
Medium
Philly Fed Manufacturing Index
US
6:00pm
-
3.2
-1.6
High
Unemployment Claims
US
6:00pm
-
276K
294K
High
FOMC Member Fischer Speaks
US
6:45pm
-
-
-
Medium
FOMC Member Dudley Speaks
US
8:00pm
-
-
-
Medium
MPC Member Vlieghe Speaks
UK
10:30pm
-
-
-
Medium
ECB Monetary Policy Meeting Accounts
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