Commodities Daily Report

Friday| March 8, 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| March 8, 2013

International Commodities
Overview
US Trade Balance was at a deficit of $44.4 billion in January. German Factory Orders declined by 1.9 percent in February. st US Unemployment Claims declined to 340,000 for w/e on 1 March. European Minimum Bid Rate kept unchanged at 0.75 % in March UKs Official Bank Rate was at 0.5 percent in the current month. US Challenger Job Cuts increased by 7 percent in February as against a decline of 24.4 percent in January. Trade Balance was at a deficit of $44.4 billion in January from earlier deficit of $38.1 billion a month ago. Unemployment Claims declined by 7,000 to 340,000 for the week ending st on 1 March as compared to rise of 347,000 in prior week. Revised Nonfarm Productivity declined by 1.9 percent in Q4 of 2012 with respect to previous fall of 2 percent a quarter ago. Revised Unit Labor Costs rose by 4.6 percent in fourth quarter of 2012 when compared to rise of 4.5 percent in Q3 of 2012. Chinas Trade Balance was at a surplus of $15.3 billion in February as against a surplus of $29.2 billion in January. US Dollar Index (DX) depreciated by 0.5 percent in yesterdays trading session on the back of rise in risk appetite in the global market sentiments which led to fall in demand for the low yielding currency. Additionally, unexpected decline in US unemployment claims data also supported an upside in the currency. Further, US equities also traded on a higher note which also acted as a negative factor for the DX. The currency touched an intra-day low of 81.995 and closed at 82.12 on Thursday. The Indian Rupee appreciated by 0.6 percent in yesterdays trading session. The currency appreciated on the back of selling of dollars from exporters and some custodian banks. Additionally, late recovery in the domestic market sentiments coupled with inflow of dollars from Power Grid's bond issue which raised up to 20 billion rupees ($364.66 million) through sale of bonds also supported an upside in the currency. Further, investors kept a closed eye on major central banks decision rates and expectations that they will continue with its monetary policy measures also acted as a positive factor for the currency. The Indian Rupee touched an intra-day high of 54.42 and closed at 54.45 against dollar on Thursday. For the month of March 2013, FII inflows totaled at Rs.716.50 crores th ($127.52 million) as on 7 March 2013. Year to date basis, net capital th inflows stood at Rs.47,214.70 crores ($8,762.10 million) till 7 March 2013. UKs Asset Purchase Facility remained unchanged at 375 billion Pounds in the month of March. Official Bank Rate was at 0.5 percent in the current month.

Market Highlights (% change)

Last INR/$ (Spot) 54.45 Prev day 0.6

as on 7 March, 2013 w-o-w -0.2 m-o-m -2.3 y-o-y -7.7

$/Euro (Spot)

1.3104

1.1

0.4

-2.2

-0.3

Dollar Index NIFTY

82.12

-0.5

0.1

2.3

3.4

5863.3

0.8

3.0

-1.3

9.9

SENSEX

19413.5

0.8

2.9

-0.9

6.1

DJIA

14329.5

0.2

2.0

2.8

11.6

S&P

1544.3

0.2

1.9

2.3

14.5

Source: Reuters

The Euro appreciated by 1.1 percent in yesterdays trade as the ECB kept its benchmark interest rates unchanged to 0.75 percent coupled with ECB president Draghi comment that region economy will become stable. Additionally, decline in borrowing cost for Spain also supported currency to be on stronger side. However, sharp upside in the currency was cap on the back of negative factory orders from Germany and rise in French trade deficit. French Trade Balance was at a deficit of 5.9 billion Euros in January as against a previous deficit of 5.4 billion Euros a month ago. German Factory Orders declined by 1.9 percent in the month of February as compared to 1.1 percent rise in January. European Minimum Bid Rate kept unchanged at 0.75 percent in the month of March. The Euro touched an intra-day high of 1.3118 and closed at 1.3104 against dollar on Thursday. Japans Current Account was at surplus of 0.36 trillion yen in January as against a previous surplus of 0.11 trillion yen a month ago. Bank Lending rose to 1.5 percent in February from 1.3 percent in January. Final GDP Price Index declined by 0.7 percent in Q4 of 2012 as compared to earlier fall of 0.6 percent in Q3 of 2012.

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Commodities Daily Report

Friday| March 8, 2013

International Commodities
Bullion Gold
Spot gold prices declined by 0.3 percent in the yesterdays trading session as European central bank and Bank of England gave no hint on further monetary stimulus. Additionally, positive job data from US added downside pressure. Further optimistic global market sentiments and overall favorable economic datas from US showing improving US economy pressured gold safe heaven appeal. However, weakness in DX cushioned the sharp downfall in prices. The yellow metal touched an intra-day low of $1574.44/oz and closed at $1578.4/oz on Thursday trading session. In the Indian markets, prices declined by 0.7 percent yesterday and closed at Rs29389/10 gms after touching an intra-day low of Rs. 29358/10 gms on Thursday. In the domestic markets appreciation in the rupee added downside pressure. Market Highlights - Gold (% change)
Gold Gold (Spot) Gold (Spot Mumbai) Gold (LBMA-PM Fix) Comex Gold (April13) MCX Gold (April13) Unit $/oz Rs/10 gms $/oz Last 1578.4 29430.0 Prev. day -0.3 0.1 as on7 March, 2013 WoW -0.1 -0.2 MoM -5.5 -3.1 YoY -6.3 6.6

1579.5

0.3

-0.6

-5.3

-5.8

$/oz

1574.8

0.0

-0.2

-5.7

-5.8

Rs /10 gms

29389.0

-0.7

-0.6

-4.6

Source: Reuters

Silver
Taking cues from decline in gold prices, Spot silver prices ended negative by 0.5 percent on Thursday. European central bank and Bank of England gave no hint on further monetary stimulus coupled with negative German factory orders added downside pressure. However, weakness in DX and positive job data from US cushioned sharp downfall in prices. Further, decline in borrowing cost for Spain also prevented sharp decline in prices. The white metal prices touched an intra-day low of $28.73/oz and closed at $28.9/oz in yesterdays trade. On the domestic front, prices ended on a negative note by 0.6 percent and closed at Rs. 54656/kg after touching an intra-day low of Rs. 54616/kg on Thursday. Appreciation in the Indian rupee added downside pressure on prices in MCX.

Market Highlights - Silver (% change)

Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (May13) MCX Silver (May13) Unit $/oz Rs/1 kg Last 28.9 55390.0 Prev day -0.5 0.5

as on 7 March, 2013 WoW 1.3 -0.6 MoM -8.2 -5.9 YoY -13.4 -3.7

$/oz $/ oz

2901.0 2876.7

0.9 0.0

0.2 1.1

-8.6 -8.5

-12.5 -14.9

Rs / kg

54656.0

-0.6

2.6

-5.8

Source: Reuters

Technical Chart Spot Gold

Outlook
In the intraday, we expect precious metals to trade on a positive note on the back of optimistic global market sentiments coupled with weakness in DX. Further, expectation of positive German industrial data will support prices to trade positive. However, as European central bank and Bank of England gave no hint on further monetary stimulus may cap sharp rallies. In the Indian markets, appreciation in the Indian Rupee will cap sharp upside in prices on MCX. Technical Outlook
Unit Spot Gold MCX Gold Apr13 Spot Silver MCX Silver May13 $/oz Rs/10 gms $/oz Rs/kg valid for March 8, 2013 Support 1571/1568 29272/29155 28.65/28.51 54430/54220 Resistance 1582/1589 29475/29592 28.99/29.21 54830/55030
Source: Telequote

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Commodities Daily Report

Friday| March 8, 2013

Energy

International Commodities
Market Highlights - Crude Oil (% change)
Crude Oil WTI (Spot) Brent (Spot) Nymex Crude (April 13) ICE Brent Crude (March13) MCX Crude (Mar 13) Unit $/bbl $/bbl $/bbl Last 91.5 111.6 91.6 Prev. day 1.2 0.1 1.2 WoW -0.5 -1.6 -0.5 as on 7 March, 2013 MoM -4.5 -5.6 -4.5 YoY -13.8 -12.3 -13.8

Crude Oil
Nymex crude oil prices increased around 1.2 percent yesterday taking cues from unexpected decline in the US unemployment claims which led to expectations of rise in demand for the fuel. Additionally, statement from the European Central Bank (ECB) President Mario Draghi that the Euro region growth will stabilize coupled with weakness in the DX also supported an upside in the crude oil prices. However, sharp upside in the prices was capped as a result of operations resumed in the North Sea after a shut down in the pipeline for the five days. Crude oil prices touched an intra-day high of $91.73/bbl and closed at $91.56/bbl in yesterdays trading session. On the domestic bourses, prices gained by 0.8 percent and closed at Rs.4,980/bbl after touching an intra-day high of Rs.5,003/bbl on Thursday. Appreciation in the Indian Rupee prevented further gains in the prices on the MCX.

$/bbl

111.2

0.1

-0.2

-5.2

-10.4

Rs/bbl

4980.0

0.8

-1.9

-3.0

Source: Reuters

Market Highlights - Natural Gas (% change)

Natural Gas (NG) Nymex NG MCX NG (Mar 13) Unit $/mmbtu Rs/ mmbtu Last 3.582 196.2 Prev. day 3.02 2.03

as on 7 March, 2013

Natural Gas
Nymex natural gas prices gained around 3 percent yesterday on the back of more than forecasted decline in the US natural gas inventories. Further, expectations of cool winter weather also acted as a positive factor for the gas prices. Weakness in the DX also supported an upside in the prices. Gas prices touched an intra-day high of $3.603/mmbtu and closed at $3.582/mmbtu on Thursday. On the domestic front, prices rose by 2 percent and closed at Rs.196.20/mmbtu after touching an intra-day high of Rs.196.80 /mmbtu in yesterdays trade. Appreciation in the Indian Rupee restricted sharp gains in the prices. EIA Inventories Data US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined more than expected by 146 billion cubic feet (bcf) which stood at 2.083 trillion cubic feet for the week ending on 1st March 2012.

WoW 4.86 9.92

MoM 9.01 9.92

YoY 55.40 67.26

Source: Reuters

Technical Chart NYMEX Crude Oil

SSource: Telequote

Outlook For the intra-day perspective, we expect crude oil prices to trade on a positive note on the back of rise in risk appetite in the global market sentiments, favorable economic data from US along with weakness in the DX. Further, statement from ECB President Mario Draghi expecting that regions growth outlook will stabilize coupled with forecast of favorable economic data from US and Euro region will also support an upside in the prices. In the Indian markets, appreciation in the Indian Rupee will cap sharp gains in the prices on the MCX. Technical Outlook valid for March 8, 2013
Unit NYMEX Crude Oil MCX Crude March 13 $/bbl Rs/bbl Support 90.85/90.10 4945/4911 Resistance 92.10/92.70 5008/5037

Technical Chart NYMEX Natural Gas

Source: Telequote

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Commodities Daily Report

Friday| March 8, 2013

International Commodities
Base Metals
The base metals pack traded on a positive note in yesterdays trading session on the back of positive jobless claims data from US coupled with weakness in DX. Additionally, optimistic global market sentiments, decline in borrowing cost for Spain along with US Federal Reserve survey showed that US economy is growing at a modest to moderate pace also supported prices to trade positive. However, decline in German factory orders capped the sharp rallies. In the Indian markets, appreciation in the Indian Rupee capped sharp upside in the prices on MCX platform. Market Highlights - Base Metals (% change)
Unit LME Copper (3 month) MCX Copper (April13) LME Aluminum (3 month) MCX Aluminum (Mar13) Rs /kg 106.6 0.3 1.1 -4.3 $/tonne 1982.0 1.3 -1.2 -5.8 -10.4 Rs/kg 427.2 0.0 2.2 -3.2 $/tonne Last 7751.8 Prev. day 0.6 as on 7 March, 2013 WoW -0.8 MoM -1.2 YoY -6.4

Copper
Copper, the leader of the base metal pack increased by percent yesterday on account of positive jobless claims data from US coupled with weakness in DX. Additionally, optimistic global market sentiments along with decline in borrowing cost for Spain supported prices to trade positive. However, rise in LME copper inventories by 1.6 percent which stood at 481,225 tonnes coupled with negative German factory orders data capped sharp rallies in prices. The red metal touched an intra-day high of $7789.75/tonne and closed at $7751.8/tonne in yesterdays trading session. On the domestic front, prices ended on flat note after touching an intra-day high of Rs. 428.5/kg and closed at Rs. 427.2/kg on Thursday. Appreciation in the Indian Rupee capped upside moment in prices on MCX. Outlook In the intra-day, we expect base metals prices to trade on the positive note on account of expectation of positive Industrial production data from Germany along with expectation of positive US economic data. Further, US Federal Reserve survey showed that US economy is growing at a modest to moderate pace coupled with weakness in DX will also support prices to trade positive. Appreciation in the Indian Rupee will cap sharp rallies in prices on the MCX. Technical Outlook
Unit MCX Copper April13 MCX Zinc Mar 13 MCX Lead Mar 13 MCX Aluminum Mar13 MCX Nickel Mar 13 Rs /kg Rs /kg Rs /kg Rs /kg Rs /kg valid for March 8, 2013 Support 426.30/423.80 107.15/106.50 119.10/117.90 106.05/104.90 904/900 Resistance 428.70/430.20 108.55/109.35 121.15/122.15 107.20/107.85 912/916

LME Nickel (3 month) MCX Nickel (Mar13) LME Lead (3 month) MCX Lead (Mar13) LME Zinc (3 month) MCX Zinc (Mar13)

$/tonne

16610.0

0.4

0.0

-8.4

-12.9

Rs /kg

907.5

-0.4

1.7

-6.6

$/tonne

2210.5

1.1

-3.0

-8.5

5.8

Rs /kg

120.2

0.2

-2.3

-6.9

$/tonne

1990.0

0.4

-3.8

-7.8

-1.0

Rs /kg

107.8

-0.4

-3.0

-6.2

Source: Reuters

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 7th March 481,225 5,197,450 160,962 1,198,025 286,150 6th March 473,750 5,187,925 161,022 1,200,800 287,700 Actual Change 7,475 9,525 -60 -2,775 -1,550 (%) Change 1.6 0.2 0.0 -0.2 -0.5
Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Friday| March 8, 2013

International Commodities
Important Events for Today
Indicator Bank Stress Test Results Current Account Final GDP q/q Trade Balance Consumer Inflation Expectations German Industrial Production m/m Non-Farm Employment Change Unemployment Rate Average Hourly Earnings m/m Country US Japan Japan China UK Europe US US US Time (IST) 3:00am 5:20am 5:20am Tentative Tentative 4:30pm 7:00pm 7:00pm 7:00pm Actual 0.36T 0.0% 15.3B 0.11T -0.1% -8.8B 0.6% 161K 7.9% 0.2% Forecast 0.10T -0.1% 29.2B 3.5% 0.3% 157K 7.9% 0.2% Previous High High Medium High Medium Medium High High Medium Impact

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