Commodities Daily Report

Thursday| July 4, 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

Thursday| July 4, 2013

International Commodities
Overview
US markets closed today on the eve of Independence Day holiday. India's HSBC Services PMI declined by 1.9 points to 51.7-mark in June. European Retail Sales grew by 1 percent in the month of May. UKs Services PMI rose by 2 points to 56.9-mark in the last month. US ADP Non-Farm Employment Change increased to 188,000 in June. Asian markets are trading higher today on the back of better than forecast jobs data from US in yesterdays trading session showing signs of economic growth in worlds largest economy. US Automatic Data Processing, Inc. (ADP) Non-Farm Employment Change increased by 53,000 to 188,000 in June as against a rise of 135,000 in May. Trade Balance was at a deficit of $45billion in May as compared to deficit of $40.3 billion a month ago. Unemployment Claims declined by 3,000 to 343,000 for the week ending on 28th June from rise of 346,000 in prior week. Institute for Supply Management (ISM) Non-Manufacturing Purchasing Managers' Index (PMI) fell by 1.5 points to 52.2-mark in June with respect to 53.7-level in May. India's HSBC Services PMI declined by 1.9 points to 51.7-mark in June from earlier rise of 53.6-level in May. The US Dollar Index (DX) declined around 0.4 percent in the yesterdays trade on the back of recovery in the global markets in the later part of the trade which led to fall in demand for the low yielding currency. Further, favorable economic data from the US also exerted downside pressure on the currency. The DX touched an intra-day low of 83.28 and closed at 83.45 on Wednesday. The Indian Rupee depreciated by more than 1 percent in yesterdays trading session. The currency depreciated on account of weak global and domestic markets coupled with strength in the DX in the early part of the trade. Further, outflow of foreign funds from equity and debt markets acted as a negative factor. Additionally, dollar demand from defence related companies exerted downside pressure on the currency. The currency touched an intra-day low of 60.44 and closed at 60.21 on Wednesday. For the month of June 2013, FII inflows totaled at Rs.1,204.90 crores rd ($203.71 million) as on 3 July 2013. Year to date basis, net capital rd inflows stood at Rs.73,383.10 crores ($13,704.50 million) till 3 July 2013. UKs Services Purchasing Managers' Index (PMI) rose by 2 points to 56.9mark in June as against a rise of 54.9-level in May. www.angelcommodities.com

Market Highlights (% change)

Last INR/$ (Spot) 60.211 Prev day -1.1

as on 3 July, 2013 w-o-w 0.8 m-o-m -6.3 y-o-y -9.4

$/Euro (Spot)

1.3006

0.2

0.0

-0.5

3.9

Dollar Index NIFTY

83.45

-0.4

0.3

1.0

5.0

5770.9

-1.5

3.3

-2.8

9.3

SENSEX

19177.8

-1.5

3.4

-2.2

4.9

DJIA

14988.6

0.4

0.5

-0.3

15.8

S&P

1615.1

0.1

0.7

-1.5

17.5

Source: Reuters

The Euro appreciated around 0.2 percent in the yesterdays trade on the back of weakness in the DX. Further, favorable retail sales data coupled with recovery in the global markets in the later part of the trade supported an upside in the currency. The Euro touched an intra-day high of 1.303 and closed at 1.3006 against the dollar on Wednesday. Spanish Services Purchasing Managers' Index (PMI) increased by 0.5 points to 47.8-mark in June as against a rise of 47.3-level in May. Italian Services PMI fell by 0.7 points to 45.8-level in last month from increase of 46.5-mark in May. European Final Services PMI declined by 0.3 points to 48.3level in June as compared to gain of 48.6-mark a month ago. European Retail Sales grew by 1 percent in May with respect to fall of 0.2 percent a month earlier.

Commodities Daily Report

Thursday| July 4, 2013

International Commodities
Bullion Gold
Spot gold prices increased around 0.8 percent in yesterdays trading session on the back of weakness in the DX. Further, upbeat global markets supported an upside in the prices. However, sharp upside in the prices was capped on account of SPDR gold holdings at the lowest level since February 2009. The yellow metal touched an intra-day high of $1259.60/oz and closed at $1251.20/oz in yesterdays trade. In the Indian markets, prices ended on a positive note, gaining 1.5 percent on account of sharp depreciation in the Indian Rupee. The commodity closed at Rs.26296/10 gms after touching an intra-day high of Rs.26430/10 gms on Wednesday. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1251.2 Prev. day 0.8 as on 3 July, 2013 WoW 2.1 MoM -11.3 YoY -22.5

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

Rs/10 gms $/oz

23270.0

-10.6

-10.5

-13.6

-20.9

1250.0

-0.2

1.1

-10.9

-22.5

$/oz

1252.1

-0.3

1.8

-11.6

-21.6

Rs /10 gms

26296.0

1.5

0.6

-3.2

-11.1

Silver
Taking cues from rise in gold prices along with weakness in the DX, Spot silver prices rose around 2 percent in yesterdays trading session. Further, favourable economic data from the US and rise in Euro Zone retail sales data supported an upside in prices. The white metal touched an intra-day high of $19.89/oz and closed at $19.70/oz in yesterdays trading session. On the domestic front, prices rose 2.8 percent on the back of depreciation in the Rupee and closed at Rs.40,989/kg after touching an intra-day high of Rs.41,150/kg on Wednesday. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Sept13) MCX Silver (Sept13) Unit $/oz Rs/1 kg Last 19.7 42180.0 Prev day 1.9 1.6

Source: Reuters

as on 3 July, 2013 WoW 6.4 3.7 MoM -13.3 -6.6 YoY -30.0 -21.2

$/oz $/ oz

1955.0 19.7

-0.4 2.0

4.7 5.9

-12.8 -13.3

-30.5 -30.3

Outlook
Precious metals prices in todays trade are expected to trade on a mixed note taking cues from upbeat global markets coupled with weakness in the DX. Further, jobs data from the US in tomorrows trade is expected to come on a positive note which can lead to correction in prices during the trade. Additionally, less volatility will be observed as US markets closed today on eve of Independence Day holiday. In the Indian markets, depreciation in the Rupee will support an upside in prices on the MCX. Technical Outlook
Unit Spot Gold MCX Gold Aug13 Spot Silver MCX Silver Sept13 $/oz Rs/10 gms $/oz Rs/kg valid for July 4, 2013 Support 1248/1241 26200/26050 19.50/19.20 41200/40700 Resistance 1258/1263

Rs / kg

40989.0

2.8

3.6

-7.7

-22.0

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

26400/26500 19.80/20.05 41900/42300

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Commodities Daily Report

Thursday| July 4, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased sharply around 3.3 percent in yesterdays trade; taking cues from more than expected decline in US crude oil inventories. Additionally, unrest in Egypt led to supply concerns from the region which supported an upside in the prices. Further, favorable jobs data from the US coupled with weakness in the DX also acted as a positive factor. Crude oil prices touched an intra-day high of $102.18/bbl and closed at $101.20/bbl in yesterdays trading session. On the domestic bourses, prices gained 3.1 percent and closed at Rs.6,111/bbl after touching an intra-day high of Rs.6,173/bbl on Wednesday. EIA Inventories Data As per the US Energy Department (EIA) report, US crude oil inventories decline more than expectations by 10.3 million barrels to 383.80 million barrels for the week ending on 28th June 2013. Gasoline stocks fell by 1.7 million barrels to 223.70 million barrels and whereas distillate stockpiles dropped by 2.4 million barrels to 120.80 million barrels for the last week. Market Highlights - Crude Oil (% change)
Crude Oil Brent (Spot) Nymex Crude (Aug 13) ICE Brent Crude (Aug13) MCX Crude (July 13) Unit $/bbl $/bbl Last 104.1 101.2 Prev. day -0.2 3.3 WoW 3.2 6.2 as on 3 July, 2013 MoM 2.0 8.0 YoY 4.2 20.9

$/bbl

105.8

1.7

4.0

3.6

6.0

Rs/bbl

6111.0

3.1

5.5

15.6

28.0
Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (July 13) Unit $/mmbtu Rs/ mmbtu Last 3.691 221

(% change)

as on 3 July, 2013

Prev. day 1.1 1.1

WoW -1.63 -2.04

MoM -7.40 -2.26

YoY 27.58 40.76

Source: Reuters

Technical Chart NYMEX Crude Oil

Natural Gas
Nymex natural gas prices rose more than 1 percent yesterday on the back of less than expected decline in US natural gas inventories coupled with weakness in the DX. Additionally, warm weather conditions will lead to rise in air conditioners demand and acted as a positive factor for prices and touched an intra-day high of $3.7/mmbtu on Wednesday. EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory increased less than expectations by 72 billion cubic feet (bcf) which stood at 2.605 trillion cubic feet for the week ending on 28th June 2013. Outlook From the intra-day perspective, we expect crude oil prices to trade higher on the back of more than forecast of decline in US crude oil inventories in yesterdays trade, unrest in Egypt along with weakness in the DX. Additionally, less volatility will be observed as US markets closed today on eve of Independence Day holiday. 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 July13 $/bbl Rs/bbl valid for July 4, 2013 Support 100.40/99.60 6070/6020 Resistance 101.80/102.60 6150/6200
Source: Telequote Source: Telequote

Technical Chart NYMEX Natural Gas

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Commodities Daily Report

Thursday| July 4, 2013

International Commodities
Base Metals
The base metals pack traded on a mixed note in yesterdays trading session on the back of favourable jobs data from the US coupled with weakness in the DX. Further, decline in LME inventories apart from Nickel and Copper also supported an upside in prices. However, sharp upside in prices was capped as a result of decline in ISM non-manufacturing data from the US. In the Indian markets, depreciation in the Rupee acted as a positive factor for prices on the MCX. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (Aug13) LME Aluminum (3 month) MCX Aluminum (July13) LME Nickel (3 month) MCX Nickel (July13) LME Lead (3 month) MCX Lead (July13) LME Zinc (3 month) MCX Zinc (July13)
Source: Reuters

as on 3 July, 2013 WoW 3.8 MoM -10.9 YoY -9.4

Last 6994.0

Prev. day 1.0

$/tonne

Rs/kg

425.8

2.1

4.2

2.5

-0.1

$/tonne

1810.0

-0.8

2.1

-5.8

-7.5

Rs /kg

107.8

0.0

2.5

0.0

1.4

Copper
Copper prices rose around 1 percent in yesterdays trade on the back of short term supply concerns. Further, recovery in the global market sentiments coupled with weakness in the DX supported an upside in the prices. However, sharp upside in prices was capped on account of rise in LME copper inventories around 0.2 percent which stood at 660,725 tonnes. The red metal touched an intra-day high of $7005/tonne and closed at $6994/tonne in yesterdays trading session. On the domestic front, prices gained 2.1 percent as a result of depreciation in the Rupee and closed at Rs. 425.80/kg, after touching an intra-day high of Rs.426.20/kg on Wednesday. Outlook In todays session, we expect base metals prices to trade on higher note in the international markets on the back of short term supply concerns in Copper and Aluminium. Further, weakness in the DX coupled with recovery in the market sentiments will support an upside in the prices. Also investors need to keep a close eye on ECB conference meeting today and any major announcements from the same will act as a positive factor. Additionally, less volatility will be observed as US markets closed today on eve of Independence Day holiday. In the Indian markets, depreciation in the Rupee will support an upside in prices on the MCX. Technical Outlook
Unit MCX Copper Aug13 MCX Zinc July 13 MCX Lead July 13 MCX Aluminum July13 MCX Nickel July 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for July 4, 2013 Support 423/419 111.50/110.50 124.80/124.0 107.0/106.30 832/826 Resistance 429/432 113.0/113.80 126.20/127.0 108.50/109.20 845/852

$/tonne

13866.0

-1.0

1.7

-8.5

-18.4

Rs /kg

837.9

0.1

1.5

-2.3

-10.3

$/tonne

2083.5

0.1

2.6

-6.0

9.4

Rs /kg

125.5

1.0

1.8

0.0

19.9

$/tonne

1875.3

-0.6

1.9

-3.6

-0.9

Rs /kg

112.2

0.3

2.2

2.7

8.0

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 3 July 660,725 5,436,400 190,590 1,043,700 197,750
rd

2 July 659,200 5,444,675 188,652 1,050,400 198,050

nd

Actual Change 1,525 -8,275 1,938 -6,700 -300

(%) Change 0.2 -0.2 1.0 -0.6 -0.2

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Thursday| July 4, 2013

International Commodities
Important Events for Today
Indicator BOJ Gov Kuroda Speaks Halifax HPI m/m French 10-y Bond Auction Asset Purchase Facility Official Bank Rate MPC Rate Statement Minimum Bid Rate ECB Press Conference Bank Holiday Country Japan UK Tentative UK UK UK Euro Euro US Time (IST) 6:00am 12:30pm Euro 4:30pm 4:30pm Tentative 5:15pm 6:00pm All Day Actual Forecast 0.4% 375B 0.5% 0.5% Previous 0.4% 2.04/1.6 375B 0.5% 0.5% Impact High Medium Medium High High High High High -

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