Commodities Daily Report

Wednesday| June 19, 2013

International Commodities

Content
Overview Precious Metals Energy Base Metals Important Events for today

Research Team
Reena Rohit Chief Manager Non-Agri Currencies and Commodities Reena.rohit@angelbroking.com (022) 2921 2000 Extn :6134 Anish Vyas Research Analyst anish.vyas@angelbroking.com (022) 2921 2000 Extn :6104

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Commodities Daily Report

Wednesday| June 19, 2013

International Commodities
Overview
US Building Permits grew by 0.97 million in the last month. German ZEW Economic Sentiment increased to 38.5-mark in June. UKs Consumer Price Index (CPI) rose to 2.7 percent in prior month. US Core Consumer Price Index (CPI) rose to 0.2 percent in May. Japans Trade Balance was at a deficit of 0.82 trillion Yen a month ago. Asian markets are trading higher today on the back of increase in Japanese exports after increase in the countrys shipments along with less than expected fall in trade balance data of the economy. US Building Permits grew by 0.97 million in May as against a rise of 1.01 million in April. Core Consumer Price Index (CPI) rose to 0.2 percent in May from earlier rise of 0.1 percent in prior month. CPI increased to 0.1 percent in last month as compared to decline of 0.4 percent in April. Housing Starts rose to 0.91 million in May with respect to rise of 0.86 million a month ago. The US Dollar Index (DX) traded on a flat note and declined marginally 0.01 percent in yesterdays trading session on the back of rise in risk appetite in global markets which led to fall in demand for low yielding currency. However, sharp downside in the currency was cushioned on account of unfavorable economic data from US. The DX touched an intraday low of 80.71 and closed at 80.75 on Tuesday. The Indian Rupee depreciated 1.3 percent in yesterdays trading session. The currency depreciated on account of heavy dollar demand from defense companies and oil importers. Further, weak domestic markets and stronger DX in the early part of the trade added downside pressure on the currency. Additionally, concerns over the current account deficit of the country acted as negative factor for the Indian Rupee. The currency touched an intra-day low of 58.87 and closed at 58.83 against dollar on Tuesday. For the month of June 2013, FII outflows totaled at Rs.1,871.30 crores ($316.02 million) as on 18th June 2013. Year to date basis, net capital inflows stood at Rs.81,333.80 crores ($15,037.0 million) till 18 th June 2013. UKs Consumer Price Index (CPI) rose to 2.7 percent in May as against a rise of 2.4 percent in April. Producer Price Index (PPI) Input declined by 0.3 percent in last month from earlier fall of 2.3 percent in April. Japans Trade Balance was at a deficit of 0.82 trillion Yen in May as against a previous deficit of 0.70 trillion Yen a month ago.

Market Highlights (% change)

Last INR/$ (Spot) 58.83 Prev day -1.3

as on 18 June, 2013 w-o-w -0.9 m-o-m -7.2 y-o-y -5.0

$/Euro (Spot)

1.3393

0.2

0.6

4.3

5.6

Dollar Index NIFTY

80.75

0.0

-0.4

-3.8

1.6

5813.6

-0.6

0.4

-6.0

14.8

SENSEX

19223.3

-0.5

0.4

-5.2

5.1

DJIA

15318.2

0.9

1.3

-0.5

20.2

S&P

1651.8

0.8

1.6

-0.9

22.8

Source: Reuters

The Euro appreciated 0.2 percent in the yesterdays trading session on the back of favorable economic sentiments data from the region. Further, upbeat global markets in the later part of the trade coupled with weakness in the DX supported an upside in the currency. The Euro touched an intra-day high of 1.3415 and closed at 1.3393 against the dollar on Tuesday. German ZEW Economic Sentiment increased by 2.1 points to 38.5-mark in June as against a rise of 36.4-level in May. European ZEW Economic Sentiment gained by 3 points to 30.6level in current month from 27.6-mark in last month.

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Commodities Daily Report

Wednesday| June 19, 2013

International Commodities
Bullion Gold
Spot gold prices gained declined 1.2 percent in yesterdays trading session on the back of rise in risk appetite in the global markets which led to fall in safe haven appeal for the commodity. The yellow metal touched an intra-day low of $1360.54/oz and closed at $1367.80/oz in yesterdays trading session. In the Indian markets, prices ended on a positive note, increasing 0.4 percent on account of sharp depreciation in the Rupee. The commodity closed at Rs.27967/10 gms after touching an intra-day high of Rs. 28119/10 gms on Tuesday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1367.8 Prev. day -1.2 as on 18 June, 2013 WoW -0.8 MoM 0.7 YoY -15.4

Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (August13) MCX Gold (August13)

Rs/10 gms $/oz

28025.0

0.6

1.0

8.5

-8.0

1366.8

-1.3

-0.5

-0.1

-15.9

$/oz

1366.6

-1.2

-1.8

-0.1

-15.9

Silver
Taking cues from fall in gold prices along with downside in the base metals group, Spot silver prices fell 0.9 percent yesterday. Further, unfavourable economic data from US exerted downside pressure on the prices. The white metal touched an intra-day low of $21.49/oz and closed at $21.60/oz in yesterdays trade. On the domestic front, prices gained 1 percent as a result of depreciation in the Rupee and closed at Rs.44,041/kg after touching an intra-day high of Rs.44,240/kg on Tuesday.

Rs /10 gms

27967.0

0.4

0.3

8.0

-7.4

Source: Reuters

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (July13) MCX Silver (July13) Unit $/oz Rs/1 kg Last 21.6 45230.0 Prev day -0.9 0.7

as on 18 June, 2013 WoW 0.1 -1.7 MoM -2.7 2.7 YoY -23.8 -18.7

Outlook
In todays trade, we expect precious metals to trade lower on the back of uncertainty over the Fed regarding its stimulus pullback. Despite upbeat markets in morning trade, the Fed factor will play an important role for precious metals today as this has been the major factor that drove gold prices higher after the global financial crisis. But towards the evening session, prices expected to bounce back as any announcement by Fed indicating a pullback at a later date will assure the flow of funds in the global markets in the near-term. Depreciation in the Rupee will prevent sharp fall in prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Aug13 Spot Silver MCX Silver July13 $/oz Rs/10 gms $/oz Rs/kg valid for June 19, 2013 Support 1359/1352 27850/27700 21.40/21.25 43700/43400 Resistance 1371/1374 28100/28150 21.76/22.0 44400/44800

$/oz $/ oz

2180.0 21.7

-0.3 -0.4

1.0 0.1

-3.2 -3.4

-24.3 -24.4

Rs / kg

44041.0

1.0

1.0

2.9

-19.1

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

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Commodities Daily Report

Wednesday| June 19, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices gained around 0.7 percent yesterday, taking cues from decline in API crude oil inventories. Additionally, unrest in Syria led to supply concerns from the Middle East supporting an upside in prices. Crude oil prices touched an intra-day high of $98.67/bbl and closed at $98.40/bbl in yesterdays trading session. Additionally, weakness in the DX acted as a positive factor for the crude oil prices. On the domestic bourses, prices gained 1.8 percent and the commodity closed at Rs.5,782/bbl after touching an intra-day high of Rs.5,793/bbl on Tuesday. Depreciation in the Rupee supported an upside in prices on the MCX. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories declined by 4.3 million barrels to 392.03 million barrels for the week ending on 14th June 2013. Gasoline inventories gained by 0.9 million barrels to 222.07 million barrels and whereas distillate inventories fell by 0.6 million barrels to 121.33 million barrels for the same week. EIA Inventories Forecast The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories is expected to fall by 0.5 million barrels for the week ending on 14th June 2013. Gasoline stocks are expected to gain by 0.7 million barrels whereas distillate inventories are expected to rise by 0.4 million barrels for the same period. Outlook From the intra-day perspective, we expect crude oil prices to trade higher on the back of expectations of decline in US crude oil inventories. Additionally, unrest in Syria led to supply concerns from the region coupled with fall in the API crude oil inventories will support an upside in the oil prices. Further, investors will keep a close watch on the Fed decision regarding curtailing its bond buying program or not in a meeting today. In the Indian markets, depreciation in the Rupee will support an upside in prices on the MCX. Technical Outlook
Unit NYMEX Crude Oil MCX Crude June13 $/bbl Rs/bbl valid for June 19, 2013 Support 97.80/97.0 5750/5700 Resistance 99.20/99.90
Source: Telequote Source: Telequote

Market Highlights - Crude Oil (% change)

Crude Oil Brent (Spot) Nymex Crude (July 13) ICE Brent Crude (July13) MCX Crude (June 13) Unit $/bbl $/bbl Last 104.1 98.4 Prev. day -0.2 0.7 WoW 2.3 3.2

as on 18 June, 2013 MoM -0.2 2.4 YoY 9.1 18.2

$/bbl

106.0

0.5

3.0

1.3

10.7

Rs/bbl

5782.0

1.8

4.8

9.2

22.6
Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (June 13) Unit $/mmbtu Rs/ mmbtu Last 3.911 228.6

(% change)

as on 18 June, 2013

Prev. day 0.1 1.6

WoW 5.11 4.62

MoM -3.62 1.15

YoY 47.14 57.55

Source: Reuters

Technical Chart NYMEX Crude Oil

Technical Chart NYMEX Natural Gas

5830/5870

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Commodities Daily Report

Wednesday| June 19, 2013

International Commodities
Base Metals
The base metals pack traded on negative note in the yesterdays trading session on the back of unfavourable building permits and housing starts data from US. Additionally, mixed LME inventories scenario added downside pressure on prices. However, sharp downside in prices was cushioned on account of weakness in the DX. Further, upbeat global markets in the later part of the trade prevented sharp fall in prices. In the Indian markets, depreciation in the Rupee supported an upside in prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (June13) LME Aluminum (3 month) MCX Aluminum (June13) LME Nickel $/tonne 14131.0 -0.6 -2.4 -4.7 -17.3 Rs /kg 106.5 1.0 -1.7 5.1 0.2 $/tonne 1841.0 -0.5 -2.5 -0.8 -4.5 Rs/kg 410.1 0.2 -0.2 1.0 -3.3 $/tonne Last 6990.0 Prev. day -1.4 as on 18 June, 2013 WoW -1.1 MoM -10.9 YoY -8.1

Copper
Copper prices fell 1.4 percent in yesterdays trade on the back of decline in building permits and housing starts data from US. Further, rise in LME copper inventories by 0.4 percent which stood at 632,150 tonnes acted as a negative factor. The red metal touched an intra-day low of $6965.0/tonne and closed at $6990/tonne in yesterdays trading session. On the domestic front, prices gained around 0.2 percent as a result of depreciation in the Rupee and closed at Rs. 410.10/kg, after touching an intra-day high of Rs 412.70/kg on Tuesday. Outlook In todays session, we expect base metal prices to trade with a positive note on the back of upbeat global markets. Further, rise in the Japanese exports data will also support an upside in the prices. However, sharp upside in prices will be capped on account of strength in the DX. In the Indian markets, depreciation in the Rupee will support an upside in prices on the MCX. Technical Outlook
Unit MCX Copper June13 MCX Zinc June 13 MCX Lead June 13 MCX Aluminum June13 MCX Nickel June 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for June 19, 2013 Support 407/404 107.0/106.20 122.80/121.80 108.80/107.80 827/820 Resistance 413/416 108.50/109.20 124.50/125.50 110.20/111.0 840/846

(3 month) MCX Nickel (June13) LME Lead (3 month) MCX Lead (June13) LME Zinc (3 month) MCX Zinc (June13)
Source: Reuters

Rs /kg

832.2

1.0

-1.4

1.8

-12.6

$/tonne

2106.5

-0.1

-0.3

4.6

10.1

Rs /kg

123.6

1.3

0.7

11.3

15.8

$/tonne

1857.5

-0.3

0.1

0.9

-2.2

Rs /kg

107.9

1.3

1.0

7.2

1.9

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 18 June 632,150 5,348,150 185,748 1,081,575 189,050
th

17 June 629,475 5,279,425 183,624 1,083,775 192,600

th

Actual Change 2,675 68,725 2,124 -2,200 -3,550

(%) Change 0.4 1.3 1.2 -0.2 -1.8

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Wednesday| June 19, 2013

International Commodities
Important Events for Today
Indicator Trade Balance MPC Meeting Minutes German 10-y Bond Auction Crude Oil Inventories FOMC Economic Projections FOMC Statement Federal Funds Rate Country Japan UK Euro US US US US Time (IST) 5:20am 2:00pm Tentative 8:00pm 11:30pm 11:30pm 11:30pm Actual -0.82T Forecast -0.89T 0-0-9 -0.5M <0.25% Previous -0.76T 0-0-9 1.41/1.6 2.5M <0.25% Impact Medium High Medium Medium High High Medium

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