Commodities Daily Report

Friday| April 5, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn :6130 Saif Mukadam Research Analyst saif.mukadam@angelbroking.com (022) 2921 2000 Extn :6136 Anish Vyas - Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report

Friday| April 5, 2013

International Commodities
Overview
US Unemployment Claims increased to 385,000 w/e on 29th March. Spanish Services PMI increased 45.3-level in the last month. Italian Services PMI rose by 1.9 points to 45.5-level in March. UK Services PMI rose by 0.6 points to 52.4-mark in prior month. BOJ announced that it will purchase 7.5 trillion yen of bonds a month. Asian markets are trading on a negative note apart from Japan taking cues from unfavorable economic data from US in yesterdays trade. Japanese equities trading higher on account of stimulus measures taken by the Bank of Japan and the central bank new governor announced monetary easing to end the two decades long stagnation in the economic growth. US Unemployment Claims increased by 28,000 to 385,000 for the week th ending on 29 March as against a rise of 357,000 in prior week.
SENSEX 18509.7 -1.6 -1.7 -4.7 1.2

Market Highlights (% change)

Last INR/$ (Spot) 54.88 Prev day -0.7

as on 4 April, 2013 w-o-w -1.1 m-o-m -0.8 y-o-y -7.0

$/Euro (Spot)

1.2935

0.7

0.9

-1.3

-1.6

Dollar Index NIFTY

82.80

-0.1

-0.5

0.3

4.2

5574.8

-1.7

-1.9

-4.9

4.0

The US Dollar Index (DX) declined by 0.1 percent yesterday on the back of rise in risk appetite in the global market sentiments which led to decline in demand for the low yielding currency. Additionally, European Central Bank President Mario Draghi statement that central bank will take necessary steps if the regions economy worsens coupled with US Federal Reserve Chairman Ben Bernanke statement that it will continue with its bond buying program. However, sharp downside in the currency was cushioned on account of unfavorable jobless claims data. The currency touched an intra-day low of 82.74 and closed at 82.80 on Thursday. The Indian Rupee depreciated by 0.7 percent in the yesterdays trading session. The currency depreciated on account of weak global and domestic market sentiments coupled with expectations that foreign inflows will be wiped out in near future. Additionally, strength in the DX in the early part of the trade exerted downside pressure on the currency. Further, political uncertainty and concerns of widening current account deficit also acted as a negative factor for the Indian Rupee. The currency touched an intra-day low of 54.94 and closed at 54.88 against dollar on Wednesday. For the month of April 2013, FII inflows totaled at Rs.887.40 crores ($163.15 million) as on 4th April 2013. Year to date basis, net capital th inflows stood at Rs.56,509.80 crores ($10,473.20 million) till 4 April 2013 UK Services PMI rose by 0.6 points to 52.4-mark in March as compared to 51.8-level in February. Asset Purchase Facility unchanged at 375 billion Pounds in April. Official Bank Rate also unchanged at 0.5 percent in current month.

DJIA

14606.1

0.4

0.6

1.9

10.7

S&P

1560.0

0.4

-0.6

2.3

11.5

Source: Reuters

The Euro appreciated by 0.7 percent in yesterdays trade on the back of weak dollar index coupled with favorable service PMI data from Spain and France. Further, European Central Bank (ECB) president Darghi said that bank is ready to take steps if growth in the euro region continues to get weaker also supported currency to trade on positive note. However, mixed global market sentiments capped sharp gains in Euro. Spanish Services Purchasing Managers' Index (PMI) increased by 0.6 points to 45.3-level in March as compared to 44.7-mark in February. Italian Services PMI rose by 1.9 points to 45.5-level in March as against 43.6-mark in February. European Minimum Bid Rate kept unchanged at 0.75 percent in the month of April. The Euro touched an intra-day high of 1.2949 and closed at 1.2935 against dollar on Thursday. Bank of Japan (BOJ) announced that it will purchase 7.5 trillion yen of bonds every month. Overnight Call Rate unchanged at 0.1 percent in the month of April.

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Commodities Daily Report

Friday| April 5, 2013

International Commodities
Bullion Gold
Spot gold prices decreased around 0.3 percent in the yesterdays trading session on the back of mixed global market sentiments. Further, European Central Bank and Bank of England decision to keep monetary policy unchanged also added downside pressure. Additionally, after the ECB president Draghi comments that bank will take steps if growth in the euro region continues to get weaker, kept investors away from safe haven. However, Bank of Japan decision to increase stimulus measures coupled with weak DX cushioned sharp decline in gold prices. The yellow metal touched an intra-day low of $1539.74/oz and closed at $1552.7/oz in yesterdays trading session. In the Indian markets, prices ended on positive note in the yesterday trading session on the back of depreciation in the Indian rupee and closed at Rs.29022/10 gms after touching an intra-day high of Rs. 29095/10 gms on Thursday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1552.7 Prev. day -0.3 as on 4 April, 2013 WoW -2.7 MoM -1.6 YoY -4.1

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (June13) MCX Gold (June13)

Rs/10 gms $/oz

28900.0

-1.2

-2.3

-1.8

1546.5

-1.8

-3.2

-2.1

-4.6

$/oz

1551.8

-0.1

-2.7

-1.6

-7.1

Rs /10 gms

29022.0

0.7

-1.4

-1.2

5.3

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 26.9 51930.0 Prev day -0.1 -0.3

as on 4 April, 2013 WoW -5.0 -4.8 MoM -6.9 -6.2 YoY -14.1 -

Silver
Taking cues from fall in spot gold prices coupled with mixed global market sentiments, spot silver prices decreased by 0.1 percent on Thursday. However, weak dollar index coupled with favourable economic data from euro region and UK cushioned sharp decline in prices. Further, BOJ decision of further monetary stimulus measures to boost economic growth also prevented sharp fall in prices. The white metal prices touched an intra-day low of $26.62 /oz and closed at $26.9/oz in yesterdays trade. On the domestic front, prices rose by 0.5 percent on the back of depreciation in the Indian rupee and closed at Rs. 50955/kg after touching an intra-day high of Rs. 51074/kg on Thursday.

$/oz $/ oz

2680.0 2674.8

-1.4 0.0

-6.4 -5.5

-7.6 -7.5

-16.2 -13.8

Rs / kg

50955.0

0.5

-4.9

-6.8

-8.0

Source: Reuters

Technical Chart Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a negative note on account of strength in DX coupled with decline in demand for safe haven as the ECB president Draghi said that bank will take necessary steps if growth in the euro region continues to get weaker. However, stimulus measures from BOJ, ongoing tension in Korean peninsula along with expectation of negative job data from US may prevent sharp decline in prices. In the Indian markets depreciation in the Indian rupee may cushion sharp downside in prices. Technical Outlook
Unit Spot Gold MCX Gold June13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for April 5, 2013
Source: Telequote

Support 1547/1541 29320/29210 26.70/26.50 50600/50300

Resistance 1557/1562 29520/29620 27.00/27.10 51200/51400

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Commodities Daily Report

Friday| April 5, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices declined by 1.3 percent taking cues from US crude oil inventories at the highest level in last 22 years. Additionally, rise in the US jobless claims led to expectations of decline in demand for the fuel and concerns over the economic growth in the worlds largest economy. However, sharp downside in the prices was cushioned on account of optimistic statement from ECB President Mario Draghi and Us Federal Reserve Chairman Ben Bernanke coupled with weakness in the DX. Crude oil prices touched an intra-day low of $92.12/bbl and closed at $93.26/bbl in yesterdays trading session. On the domestic bourses, prices declined around 2.0 percent and closed at Rs.5094/bbl after touching an intra-day low of Rs.5075/bbl on Thursday. Depreciation in the Indian Rupee prevented sharp fall in the prices on the MCX. Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (May 13) ICE Brent Crude (May13) MCX Crude (April 13) Unit $/bbl $/bbl $/bbl Last 93.3 106.3 93.3 Prev. day -1.9 -2.5 -1.3 WoW -4.1 -3.1 -3.4 as on 4 April, 2013 MoM 1.9 -4.8 1.9 YoY -8.1 -14.2 -10.3

$/bbl

106.3

-0.7

-3.3

-4.3

-13.1

Rs/bbl

5094.0

-2.0

-4.0

2.3

-2.7
Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (April 13) Unit $/mmbtu Rs/ mmbtu Last 3.958 215.2

(% change)

as on 5 April, 2013

Natural Gas
Nymex natural gas prices increased by 1.3 percent on the back of more than expected decline in US natural gas inventories coupled with forecast for cooler winter weather conditions. Additionally, weakness in the DX also supported an upside in the prices. Gas prices touched an intra-day high of $3.976/mmbtu and closed at $3.958/mmbtu in yesterdays trading session. On the domestic front, prices declined by 0.1 percent and closed at Rs.215.20/mmbtu after touching an intra-day low of Rs.213.20/mmbtu on Thursday. Depreciation in the Indian Rupee cushioned sharp fall in the prices on the MCX. EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined more than expected by 94 billion cubic feet (bcf) which stood at 1.687 trillion cubic feet for the week ending on 29th March 2012 Outlook From the intra-day perspective, we expect crude oil prices to trade lower on the back of weak global market sentiments coupled with strength in the DX. Further, rise in jobless claims data led to concerns for the economic growth in US also added downside pressure on the prices. Additionally, US inventories at high of 22 years will also act as a negative factor for oil prices. Depreciation in the Indian Rupee will prevent sharp fall in the prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude April 13 $/bbl Rs/bbl valid for April 5, 2013 Support 92.30/91.60 5040/5000 Resistance 93.80/94.60 5120/5160

Prev. day 1.3 -0.1

WoW -1.54 -1.91

MoM 11.97 10.02

YoY 85.21 91.63

Source: Reuters

Technical Chart NYMEX Crude Oil

Source: Telequote

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Friday| April 5, 2013

International Commodities
Base Metals
The base metals pack traded on a positive note on the back of weak DX coupled with positive services PMI data from euro region and UK. Further, BOJ decision to increase stimulus measures coupled with negative LME data except copper also supported prices to trade on positive note. However, rise in Jobless claims from US coupled with mixed global market sentiments capped sharp gains in prices. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (April13) LME Nickel (3 month) MCX Nickel (April13) LME Lead $/tonne 2077.0 1.2 -1.4 -6.0 4.2 Rs /kg 889.3 1.2 -1.8 -2.0 -4.1 $/tonne 16122.0 0.5 -3.4 -2.9 -10.3 Rs /kg 103.3 1.5 1.0 -3.1 -3.3 $/tonne 1887.0 0.8 -0.8 -4.8 -9.8 Rs/kg 409.1 1.4 -1.0 -4.2 -5.0 $/tonne Last 7450.0 Prev. day 1.0 as on 4 April, 2013 WoW -1.1 MoM -5.1 YoY -10.9

Copper
Copper, the leader of the base metal pack rose by 1.0 percent in yesterdays trade on the back of weak DX coupled with favourable Services PMI data from Italy, Spain and UK. Further, monetary stimulus package from Japan coupled with Draghi comments that bank will take necessary steps if euro region growth gets weaker supported prices to trade positive. However, sharp rise in LME Copper inventories by 1.2 percent which stood at 579,175 tonnes prevented sharp gains in the prices. The red metal touched an intra-day high of $7475/tonne and closed at $7450/tonne yesterdays trading session. On the domestic front, prices ended on positive note taking cues from LME prices and closed at Rs. 409.1/kg on Thursday after touching an intra-day high of Rs 411/kg. Sharp depreciation in the Indian rupee supported prices to trade in green. . Outlook In the intra-day, we expect base metals prices to trade on the negative note on the back of strength in DX coupled with rise in risk aversion in the global market sentiments. Further, expectation of negative economic data from UK and Europe will add downside pressure. Additionally, expectation of unfavourable job data from US will act as a negative factor. However, expectation of rise in German factory orders may prevent sharp decline in prices. Technical Outlook
Unit MCX Copper April13 MCX Zinc April 13 MCX Lead April 13 MCX Aluminum April13 MCX Nickel April 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for April 5, 2013 Support 407/404 102.6/101.8 113/112.2 102.5/101.8 882/874 Resistance 411/413 104.2/105.2 114.7/115.5 104/104.8 896/902

(3 month) MCX Lead (April13) LME Zinc (3 month) MCX Zinc (April13)
Source: Reuters

Rs /kg

114.0

1.9

0.1

-5.2

10.1

$/tonne

1894.8

1.8

-0.1

-4.8

-4.3

Rs /kg

103.4

2.3

1.9

-4.1

1.1

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 4 April 579,175 5,206,800 165,942 1,156,725 260,900
th

3 April 572,325 5,212,075 166,038 1,162,025 261,425

rd

Actual Change 6,850 -5,275 -96 -5,300 -525

(%) Change 1.2 -0.1 -0.1 -0.5 -0.2

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Friday| April 5, 2013

International Commodities
Important Events for Today
Indicator FOMC Member Yellen Speaks Bank Holiday Halifax HPI m/m MPC Member Dale Speaks Retail Sales m/m German Factory Orders m/m Non-Farm Employment Change Trade Balance Unemployment Rate Average Hourly Earnings m/m Country US China UK UK Europe Europe US US US US Time (IST) 2:30am All Day Tentative 1:30pm 2:30pm 3:30pm 6:00pm 6:00pm 6:00pm 6:00pm Actual Forecast 0.2% -0.3% 1.2% 198K -44.8B 7.7% 0.2% Previous 0.5% 1.2% -2.5% 236K -44.4B 7.7% 0.2% Impact Medium Medium Medium Medium Medium High High High Medium

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