Commodities Daily Report

Wednesday| July 3, 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| July 3, 2013

International Commodities
Overview
US Factory Orders increased around 2.1 percent in May. Chinas Non-Manufacturing PMI declined to 53.9-mark in June. Spanish Unemployment Change fell to 127,200 in last month. UKs Construction PMI increased by 0.2 points to 51-mark in June. Asian markets are trading lower today on the back of decline in Chinas non-manufacturing data indicating a slowdown in the worlds second largest economy. US Factory Orders increased around 2.1 percent in May as against a rise of 1.3 percent a month ago. Investor's Business Daily (IBD)/ TechnoMetrica Institute of Policy and Politics (TIPP) Economic Optimism fell by 1.9 points to 47.1-mark in July with respect to rise of 49-level in June. Chinas Non-Manufacturing Purchasing Managers' Index (PMI) declined by 0.4 points to 53.9-mark in June as against a rise of 54.3-level in May. The US Dollar Index (DX) gained around 0.6 percent in the yesterdays trade on the back of rise in risk aversion in the global markets in later part of the trade which led to rise in demand for the low yielding currency. Further, favorable economic data from the US led to expectations that Fed will pullback its stimulus measures which also supported an upside in the currency. The DX touched an intra-day high of 83.84 and closed at 83.76 on Tuesday. The Indian Rupee traded on a mixed note in yesterdays trading session. The currency opened on an appreciation mode on the back of upbeat domestic markets coupled with weakness in the DX in early part of the trade. However, in the later part of the trade the currency wiped off its gains and depreciated around 0.3 percent. Indian Rupee depreciated on the back of huge dollar demand from defence related companies. Additionally, outflow of foreign funds from equity and debt markets exerted downside pressure in the Rupee. The currency touched an intraday low of 59.715 and closed at 59.54 on Tuesday. For the month of June 2013, FII inflows totaled at Rs.1,211.40 crores ($204.80 million) as on 2nd July 2013. Year to date basis, net capital inflows stood at Rs.73,389.60 crores ($13,705.60 million) till 2 nd July 2013. UKs Construction Purchasing Managers' Index (PMI) increased by 0.2 points to 51-mark in June as against a rise of 50.8-level in May.

Market Highlights (% change)

Last INR/$ (Spot) 59.54 Prev day -0.3

as on 2 July, 2013 w-o-w 0.2 m-o-m -5.3 y-o-y -9.0

$/Euro (Spot)

1.2977

-0.7

-0.8

-0.1

3.0

Dollar Index NIFTY

83.76

0.6

1.2

1.2

5.4

5857.6

-0.7

4.4

-2.1

11.0

SENSEX

19463.8

-0.6

4.5

-1.5

6.4

DJIA

14932.4

-0.3

1.2

-0.2

16.0

S&P

1614.1

-0.1

1.6

-1.0

18.2

Source: Reuters

The Euro depreciated around 0.7 percent in the yesterdays trade on the back of strength in the DX. Further, weak global markets also exerted downside pressure in the currency. The Euro touched an intra-day low of 1.2962 and closed at 1.2977 against the dollar on Tuesday. However, sharp downside in the currency was cushioned on account of favourable economic data from the country. Spanish Unemployment Change fell to 127,200 in June as against a previous fall of 98,300 in May. European Producer Price Index (PPI) fell by 0.3 percent in May from earlier fall of 0.6 percent a month ago.

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Commodities Daily Report

Wednesday| July 3, 2013

International Commodities
Bullion Gold
Spot gold prices declined around 1 percent in yesterdays trading session on the back of strength in the DX. Further, weak global markets coupled with decline in SPDR gold holdings which are at lowest level since February 2009 exerted downside pressure on the prices. The yellow metal touched an intra-day low of $1238.54/oz and closed at $1241.40/oz in yesterdays trade. In the Indian markets, prices ended on a negative note, declining 0.3 percent. The commodity closed at Rs.25907/10 gms after touching an intra-day low of Rs.25821/10 gms on Tuesday. Depreciation in the Rupee prevented sharp fall in prices on the MCX. Market Highlights - Gold (% change)
Gold Gold (Spot) Unit $/oz Last 1241.4 Prev. day -0.9 as on 2 July, 2013 WoW -2.8 MoM -10.5 YoY -23.1

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

Rs/10 gms $/oz

26030.0

1.1

-3.0

-3.8

-11.3

1252.5

0.8

-2.1

-10.2

-22.6

$/oz

1243.6

-1.0

1.1

-12.2

-22.1

Rs /10 gms

25907.0

-0.3

-2.5

-3.6

-12.1

Silver
Taking cues from fall in gold prices along with strength in the DX, Spot silver prices fell around 1.2 percent in yesterdays trading session. However, sharp downside in prices was cushioned on account of upside in base metals complex. The white metal touched an intra-day low of $19.21/oz and closed at $19.30/oz in yesterdays trading session. On the domestic front, prices fell 0.5 percent and closed at Rs.39,883/kg after touching an intra-day low of Rs.39,750/kg on Tuesday. Depreciation in the Rupee prevented sharp fall in prices on the MCX. Market Highlights - Silver (% change)
Silver Silver (Spot) Silver (Spot Mumbai) Silver (LBMA) Comex Silver (Sept13) MCX Silver (Sept13) Unit $/oz Rs/1 kg Last 19.3 41500.0 Prev day -1.2 1.3

Source: Reuters

as on 2 July, 2013 WoW -1.3 -1.9 MoM -13.0 -8.3 YoY -31.5 -22.1

$/oz $/ oz

1962.0 19.3

0.9 0.0

-0.8 3.8

-13.1 -15.0

-29.7 -31.7

Rs / kg

39883.0

-0.5

-1.9

-8.6

-24.0

Outlook
Precious metals prices in todays trade are expected to trade lower taking cues from sharp rise in the DX in yesterdays trade and will continue today that will exert downside pressure on dollar denominated commodities. Further, weak global markets along with fall in the SPDR holdings will act as a negative factor. In the Indian markets, depreciation in the Rupee will cushion fall 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 3, 2013 Support 1238/1231 25750/25600 19.30/19.0 40100/39600 Resistance 1253/1258

Source: Reuters

Technical Chart Spot Gold

Source: Telequote

26050/26150 19.70/19.95 40900/41300

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Commodities Daily Report

Wednesday| July 3, 2013

International Commodities
Energy Crude Oil
Nymex crude oil prices increased around 1.6 percent in yesterdays trade; taking cues from more than expected decline in API crude oil inventories. Additionally, political turmoil in Egypt led to supply concerns from the region which supported an upside in the prices. Further, favorable economic data from the US and Euro Zone also acted as a positive factor. However, sharp upside in prices was capped on account of strength in the DX. Crude oil prices touched an intra-day high of $99.87/bbl and closed at $99.60/bbl in yesterdays trading session. On the domestic bourses, prices gained 1.7 percent as a result of depreciation in the Rupee and closed at Rs.5,929/bbl after touching an intra-day high of Rs.5,958/bbl on Tuesday. API Inventories Data As per the American Petroleum Institute (API) report last night, US crude oil inventories declined more than expected by 9.36 million barrels to 382.64 million barrels for the week ending on 28th June 2013. Gasoline inventories fell by 183,000 barrels to 223.12 million barrels and whereas distillate inventories dropped by 2.27 million barrels to 119.58 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 2.3 million barrels for the week ending on 28th June 2013. Gasoline stocks are expected to gain by 0.6 million barrels whereas distillate inventories are expected to rise by 1.2 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 coupled with political turmoil in Egypt. Further, more than expected drop in API crude oil inventories in yesterdays trade along with forecast for favorable economic data from the US and Euro Zone will support an upside in prices. However, strength in the DX will cap sharp gains in the prices. In the Indian markets, depreciation in the Rupee will act as a positive factor. Technical Outlook
Unit NYMEX Crude Oil MCX Crude July13 $/bbl Rs/bbl valid for July 3, 2013 Support 101.40/100.30 5900/5860 Resistance 103.10/103.90 6000/6050
Source: Telequote Source: Telequote

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 99.6 Prev. day -0.2 1.6 WoW 2.4 4.5

as on 2 July, 2013 MoM 3.3 6.3 YoY 4.0 18.9

$/bbl

104.0

1.0

2.7

3.6

3.3

Rs/bbl

5929.0

1.7

4.2

12.4

24.7
Source: Reuters

Market Highlights - Natural Gas

Natural Gas (NG) Nymex NG MCX NG (July 13) Unit $/mmbtu Rs/ mmbtu Last 3.651 218.6

(% change)

as on 2 July, 2013

Prev. day 1.5 2.3

WoW -0.08 -0.46

MoM -8.34 -4.00

YoY 28.38 40.49

Source: Reuters

Technical Chart NYMEX Crude Oil

Technical Chart NYMEX Natural Gas

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Commodities Daily Report

Wednesday| July 3, 2013

International Commodities
Base Metals
The base metals pack traded on a positive note in yesterdays trading session on the back of favourable economic data from the US and Euro Zone. Further, decline in LME inventories apart from Nickel also supported an upside in prices. However, sharp upside in prices was capped as a result of weak global markets coupled with strength in the DX. 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 2 July, 2013 WoW 2.4 MoM -11.7 YoY -11.0

Last 6927.8

Prev. day -0.5

$/tonne

Rs/kg

417.1

0.0

3.4

1.0

-2.2

$/tonne

1824.8

0.0

2.6

-4.1

-7.4

Rs /kg

107.8

0.5

3.9

1.7

1.3

Copper
Copper prices fell around 0.5 percent in yesterdays trade on the back of stronger DX coupled with weak global markets. Further, expectations that Fed will pullback its bond buying program after favourable factory orders data from the US also exerted downside pressure on prices. However, sharp downside in prices was cushioned on account of decline in LME copper inventories around 0.5 percent which stood at 659,200 tonnes. The red metal touched an intra-day low of $6905/tonne and closed at $6927.80/tonne in yesterdays trading session. On the domestic front, prices traded on a flat note as a result of depreciation in the Rupee and closed at Rs. 417.10/kg, after touching an intra-day high of Rs.418.90/kg on Tuesday. Outlook In todays session, we expect base metals prices to trade on mixed note in the international markets on the back of sharp rise in the DX in yesterdays trade and is expected to continue today which will add downside pressure on dollar denominated commodities. However, expectations of favourable economic data from the US and Euro Zone will cushion sharp fall in the prices. 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 3, 2013 Support 414/411 111.0/110.20 123.50/122.50 107.0/106.40 832/825 Resistance 421/423 112.50/113.50 125.20/126.0 108.50/109.50 845/852

$/tonne

14000.0

0.1

0.7

-5.6

-18.7

Rs /kg

837.0

0.7

1.3

1.0

-11.0

$/tonne

2081.0

-0.4

1.5

-5.4

8.0

Rs /kg

124.3

0.3

1.8

0.3

18.4

$/tonne

1887.0

0.2

2.2

-1.8

-1.2

Rs /kg

111.9

0.9

3.3

5.2

7.5

LME Inventories
Unit Copper Aluminum Nickel Zinc Lead tonnes tonnes tonnes tonnes tonnes 1 July 659,200 5,444,675 188,652 1,050,400 198,050
st

28 June 662,275 5,450,175 187,716 1,056,075 198,200

th

Actual Change -3,075 -5,500 936 -5,675 -150

(%) Change -0.5 -0.1 0.5 -0.5 -0.1

Source: Reuters

Technical Chart LME Copper

Source: Telequote

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Commodities Daily Report

Wednesday| July 3, 2013

International Commodities
Important Events for Today
Indicator FOMC Member Powell Speaks Non-Manufacturing PMI Spanish Services PMI Italian Services PMI Services PMI BOE Credit Conditions Survey Retail Sales m/m ADP Non-Farm Employment Change Trade Balance Unemployment Claims ISM Non-Manufacturing PMI Treasury Sec Lew Speaks Crude Oil Inventories Country US China Euro Euro UK UK Euro US US US US US US Time (IST) 3:15am 6:27am 12:45pm 1:15pm 2:00pm 2:00pm 2:30pm 5:45pm 6:00pm 6:00pm 7:30pm 7:30pm 8:00pm Actual 53.9 Forecast 47.8 47.1 54.6 0.4% 161K -40.3B 345K 54.3 -2.3M Previous 54.3 47.3 46.5 54.9 -0.5% 135K -40.4B 346K 53.7 0.0M Impact Medium Medium Medium Medium High Medium Medium High High High High Medium Medium

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