Content203.199.89.36/.../Daily...Energy_Report_Sep_7_2016.pdfDepartment report showed Friday in Washington. The median forecast in a Bloomberg survey called for 180,000. The unemployment

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Wednesday, 07 September

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International Commodity Daily Reports

Content

Overview

Precious Metals

Energy

Base Metals

Important Events for today

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Wednesday, 07 September

2016

International Commodity Daily Reports

Market Overview

Asian markets are trading on a mixed note tracking losses on Wall

Street after the disappointing release of non-manufacturing data

from the US which has dimmed the possibility of a rate hike in Sep’16

monetary policy review.

US Dollar Index traded lower by more than 1 percent in yesterday’s

trading session. Reason behind this weakness could be attributed to

the disappointing release of non-manufacturing data from the nation

that grew lesser than the forecasted levels in Aug’16. The pace of

growth was at its slowest in more than six years.

Moreover, last week’s employment data from the nation also came

on a weak note. NFP employment data plunged to 151K from

previous month’s 275K in Aug’16. Even average earnings and

unemployment data came on a bitter note which has fueled

speculation in the economy with respect to the strength of the labor

market of the US. All the above factors have raised caution in the

market with respect to delay in rate hike timing.

The American currency made an intraday low of 94.76 and closed at

94.82 on Tuesday.

The Indian Rupee appreciated by 0.2 percent yesterday owing to

sustained selling of the greenback by exporters and banks amid lower

dollar in the overseas market. Moreover, heavy influx of capital into

the domestic markets has helped the Indian currency to stay

supportive.

Domestic markets i.e. Sensex and Nifty traded higher owing to weak

release of economic data from the US which has dimmed the

possibility of a US rate hike in Sep’16 monetary policy review.

For the month of September 2016, FII inflows in equities totaled at

Rs. 786.77 crores ($117.51 million) as on 6th

September’16. Year to

date basis, net capital outflows stood at Rs. 41636.50 crores

($6254.66 million) as on 6th

September’16.

News & developments

IMF to downgrade its 2016 global growth forecast International Monetary Fund Managing Director Christine Lagarde

said the institution will likely downgrade its 2016 global growth

forecast again as economic prospects are dimmed by weak demand,

flagging trade and investment and growing inequality.

Lagarde told Reuters in an interview that G20 leaders need to do far

more to spur demand, bolster the case for trade and globalization,

and fight inequality. (Reuters)

Market Highlights (% change) as on Sep 6, 2016

INDICES LAST CHANGE WOW MOM YOY

INR/$ (Spot) 66.3 0.24 1.0 0.8 0.9

Euro/$ (Spot) 1.1 0.97 0.9 1.5 0.8

Dollar Index 94.8 -1.1 -1.2 -1.4 19.3

NIFTY 8943.0 #N/A 1.8 2.7 14.9

SENSEX 28978.0 #N/A 1.8 2.8 58.4

DJIA 18538.1 0.25 0.2 0.0 12.4

S&P 2186.5 0.3 5.9 6.2 n/a

Source: Reuters

o Payrolls in U.S. Cool in August as Jobless Rate Holds Steady U.S. payrolls grew at a slower but solid pace in August while

measures of labor slack were little changed, signs the job market

is cooling as the economy approaches full employment.

Payrolls climbed by 151,000 last month following a 275,000 gain in

July that was larger than previously estimated, a Labor

Department report showed Friday in Washington.

The median forecast in a Bloomberg survey called for 180,000.

The unemployment rate and labor participation rate held steady,

while wage gains moderated and hours worked were the lowest

since 2014.

The August figure is consistent with a simmering-down of payrolls

growth so far this year as the world’s largest economy slogs

through a period of weak investment and some companies have

difficulty finding workers. Analysts were divided on whether the

report gives Federal Reserve officials a green light to raise the

benchmark interest rate in September for the first time in 2016,

while futures traders slightly pared bets on a move.

Employment slowed at private service providers, with payrolls in

professional and business services posting the smallest gain since

a decrease in January. Retail jobs rose by 15,100. (Bloomberg)

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Wednesday, 07 September

2016

International Commodity Daily Reports

Market Highlights - Gold (% change) as on Sep 6, 2016

COMMODITY LAST CHANGE WOW MOM YOY

GOLD(SPOT) 1349.6 1.76 3.1 1.1 20.6

GOLD (SPOT -

MUMBAI) 31000.0 0.98 0.3 0.3 17.4

COMEX(SEP’16) 1350.0 0.04 2.9 0.4 20.5

MCX(OCT’16) 31378.0 1.27 2.1 0.6 18.4

(Comex, Gold spot in $ per ounce, MCX, Gold spot Mumbai in Rs/10 gms) Source: Reuters

Market Highlights - Silver (% change) as on Sep 6, 2016

COMMODITY LAST CHANGE WOW MOM YOY

SILVER(SPOT) 20.0 2.7 7.6 1.6 37.6

SILVER (SPOT -

MUMBAI) 46650.0 3.0 3.5 -0.1 31.4

COMEX(SEP’16) 20.0 4.0 7.9 -0.4 35.9

MCX (DEC’16) 48629.0 4.66 8.5 2.6 35.5

(Comex in $ per ounce, MCX, Silver spot in Rs/kg) Source: Reuters

MCX Gold Spread Chart

Source: Reuters

MCX Silver Spread Chart

Source: Reuters

Daily MAUc2, MAUc1 7/5/2016 - 9/8/2016 (BOM)

Spread, 145.00 INR

TOLAS

0

200145.00

11 18 25 01 08 16 22 29 05July 2016 August 2016

Daily MSVc2, MSVc1 7/4/2016 - 9/8/2016 (BOM)

Spread, 1,022.00 INR

Kg

600

9001,022.00

04 11 18 25 01 08 16 22 29 05Jul 16 Aug 16

Bullion

Gold On Tuesday, spot gold prices rose by around 1.76 percent to close at

$1349.6 per ounce the biggest percentage gain since June, as

disappointing U.S. economic data reinforced speculation in the

market that the Federal Reserve will not raise interest rates at its

September policy meeting. The U.S. non-manufacturing new orders

index for August fell to its lowest since December 2013.

The metal hit a two-month low of $1,301.91 last Thursday on

prospects that a strong non-farm payrolls report for August could put

the Fed on track to raise rates soon. Gold bounced back, however,

when the data missed expectations.

On the MCX, gold prices rose by 1.27 percent to close at Rs.31378 per

10 gms.

Silver Spot silver prices rose by 2.7 percent on Tuesday to close at $20 per

ounce in line with rise in gold prices. Weak dollar index also

supported the rise in silver prices.

On the MCX, silver prices rose by 2.46 percent to close at Rs.47607

per kg.

Outlook On an intraday basis, we expect gold prices to continue its positive

momentum from the previous trading session. Poor services data has

lead to weakness in the dollar which in turn will boost all the

commodities including precious metals.

Meanwhile, the US Federal Reserve meeting scheduled on 20-21 of

this month will be a close watch by investors across the globe.

On the MCX, gold prices are expected to trade higher today as

international markets are higher by 0.21 percent at $1352.34 per

ounce.

Technical Outlook valid for September 7, 2016

COMMODITY SUPPORT RESISTANCE SPOT GOLD ($/OZ) 1343/1337 1356/1363

MCX GOLD OCT’16 (Rs/10GMS) 31200/31050 31500/31650

NCDEX GOLD HEDGE SEP’16

(Rs/KG) 28820/28680 29100/29240

SPOT SILVER ($/OZ) 19.90/19.70 20.15/20.30

MCX SILVER DEC’16 (Rs/KG) 47300/47000 47900/48300

NCDEX SILVER HEDGE NOV’16

(Rs/kg) 43620/43310 44210/44620

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Wednesday, 07 September

2016

International Commodity Daily Reports

Market Highlights - Crude Oil (% change) as on Sep 6, 2016

COMMODITY LAST CHANGE WOW MOM YOY

BRENT (SPOT) 46.3 -0.8 0.2 8.1 1.0

NYMEX CRUDE (OCT’16) 44.8 #N/A 0.3 4.2 -2.6

ICE BRENT CRUDE (NOV’16)

47.3 -0.8 0.5 4.1 -0.8

MCX CRUDE (SEP’16) 2964.0 -0.6 -1.3 2.5 0.5

(Brent & NYMEX Crude in $ per ounce, MCX Crude in Rs/bbl) Source: Reuters

Market Highlights - Natural Gas (% change) as on Sep 6, 2016

COMMODITY LAST CHANGE WOW MOM YOY

NYMEX NG* 2.85 #N/A -4.40 3.87 #N/A

MCX NG (SEP’16) 180.60 -2.27 -7.10 -2.06 1.52

(NYMEX NG in $/MMbtu, MCX NG in Rs/MMBtu Source: Reuters

WTI Crude Oil Spread Chart

Source: Reuters

MCX Crude Spread Chart

Source: Reuters

Daily /CLc2, /CLc1 7/6/2016 - 9/9/2016 (NYC)

Spread, 0.62 USD

Bbl

0.4

0.60.62

11 18 25 01 08 15 22 29 06July 2016 August 2016

Daily MCGBV6, MCGBU6 7/4/2016 - 9/8/2016 (BOM)

Spread, 57.00 INR

Bbl

50

100

57.00

04 11 18 25 01 08 16 22 29 05July 2016 August 2016

Energy

Crude Oil

WTI oil prices rose by 0.9 percent on Tuesday to close at $44.83 per

barrel as hopes waned for an agreement between two of the biggest

oil producers to freeze output to tackle a global supply glut.

Brent had jumped 5 percent on Monday, after Saudi Arabia and Russia

agreed to cooperate in world oil markets. But Brent pared gains later

that session after Saudi Energy Minister Khalid al-Falih said there was

no need to freeze output for now.

Still, his Russian counterpart Alexander Novak said he was open to

ideas on what cut-off period to use if countries chose to freeze output,

and said even production cuts could be considered. The Organization

of the Petroleum Exporting Countries and non-OPEC producers such as

Russia will hold informal talks in Algeria on Sept. 26-28. Many in the

market are skeptical a deal will happen.

On the MCX, oil prices declined by 0.6 percent to close at Rs.2964 per

barrel.

API inventory forecast The American Petroleum Institute (API) and the U.S. Department of

Energy's Energy Information Administration (EIA) estimated, on

average, that crude stocks decreased about 100,000 barrels in the

week to Sept. 2. The data has been delayed by a day due to the Labor

Day holiday on Monday. Stockpiles of gasoline were forecast to have

decreased 500,000 barrels last week, while distillate inventories, which

include heating oil and diesel fuel, were forecast to have increased 1

million barrels.

Outlook On an intraday basis, we expect oil prices to trade lower as the glut in

the oil market continues to bother investors sentiments. Iran, OPEC's

third-largest producer, has said it would only cooperate in talks to

freeze output if fellow exporters recognised its right to fully regain

market share. The action by the oil producers to lift oil prices is a

coordinated move in the right direction.

On the MCX, oil prices are expected to trade lower although

international markets are trading higher by 0.65 percent at $45.13 per

barrel.

Technical Outlook valid for September 7, 2016

COMMODITY SUPPORT RESISTANCE

NYMEX CRUDE OIL ($/BBL) 44.50/43.70 45.90/46.70

MCX CRUDE SEP’16 (RS/BBL) 2920/2870 3010/3070

NCDEX CRUDE SEP’16 (RS.BBL) 3060/3010 3150/3210

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Wednesday, 07 September

2016

International Commodity Daily Reports

Base Metals

LME base metals traded mixed yesterday as weakness in the DX after

the US Nonfarm payrolls data came in much lower than expected,

supported dollar denominated commodities. While on the other

hand, investors remained cautious ahead of crucial data releases

from China this week.

MCX base metals traded mixed in line with international markets.

Copper LME Copper prices traded lower by 0.1 percent yesterday to close at

$4620/tonne as stocks at the LME’s Asian warehouses have

persistently risen since mid August, indicating that China is exporting

the surplus.

Also, investor interest seems to be lackluster as per latest reports.

LME's Commitments of Traders report showed total net long

position of funds trading copper on the LME fell to 18,033 lots on

Friday from 27,026 lots the previous week. Before this, even the

CFTC data showed speculators sharply increasing their net short

position in copper futures and options.

However, the metal was cushioned as US NFP climbed by just

151,000 last month following a 275,000 gain in July leading to sharp

weakness in the DX. Besides, world no.1 copper exporter Codelco

said striking workers at its small Salvador copper deposit in Chile

have blocked access to the mine and are affecting production.

MCX copper prices traded flat to close at Rs.311.1 per kg on

Tuesday.

Outlook

LME Copper is currently trading higher by 1.2 percent at

$4677/tonne. Prices will likely trade higher today as San Francisco

Fed President John Williams said that he sees slower rate hikes now

than he did just a year ago, along with weak economic data from the

US, is adding to bets that the September rate hike is unlikely. Also,

pickup in demand post the summer lull season will be supportive.

However, cautious stance ahead of trade and inflation data from

China along with persistent surge in LME stocks will restrict sharp

upside.

We expect MCX Copper prices to trade higher today.

Technical Outlook valid for September 7, 2016

COMMODITY (RS/KG) SUPPORT RESISTANCE

MCX COPPER NOV’16 309/307 313/315

MCX ZINC SEP’16 152/151 155/156

MCX LEAD SEP’16 127.50/126.50 129.50/131

MCX ALUMINUM SEP’16 104/103 106/107

MCX NICKEL SEP’16 665/659 678/685

Market Highlights – Base Metals (% change) as on Sep 6, 2016

COMMODITY LAT CHANGE WOW MOM YOY

LME Copper (3 month) 4620.0 -0.1 0.1 -22.7 -10.3

MCX Copper (NOV’16) 311.1 0.0 1.8 -17.2 -11.5

LME Aluminum(3 month) 1588.0 0.5 -1.7 -10.8 -0.6

MCX Aluminum (SEP’16) 105.0 0.1 -2.1 -5.5 -1.6

LME Nickel(3 month) 10115.0 0.9 3.5 -22.2 4.2

MCX Nickel (SEP’16) 671.2 0.6 3.2 -16.9 2.9

LME Lead(3 month) 1942.5 -1.6 2.3 3.4 16.0

MCX Lead (SEP’16) 129.1 -2.0 1.1 9.8 14.3

LME Zinc(3 month) 2317.5 -1.7 0.1 8.8 30.9

MCX Zinc (SEP’16) 153.6 -2.1 -1.3 16.0 29.4

Source: Reuters

LME Inventories in tonnes

COMMODITY 6/9/16 5/9/2016 CHG %CHG

Copper 334975 328525 6450 1.96%

ALUMINIUM 2212275 2216175 -3900 -0.18%

NICKEL 367896 367758 138 0.04%

ZINC 449925 450500 -575 -0.13%

LEAD 187000 187225 -225 -0.12%

Source: Reuters

MCX Copper Spread Chart

Source: Reuters

Daily MCCc2, MCCc1 7/4/2016 - 9/8/2016 (BOM)

Spread, 6.40 INR

Kg

6

6.40

04 11 18 25 01 08 16 22 29 05July 2016 August 2016

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2016

International Commodity Daily Reports

Economic indicators to be released on September 7, 2016

Indicator Country Time (IST) Actual Forecast Previous Impact

Halifax HPI m/m UK 1:00pm - -0.3% -1.0% Medium

Manufacturing Production m/m UK 2:00pm - -0.4% -0.3% High

MPC Member Cunliffe Speaks UK 2:45pm - - - Medium

Inflation Report Hearings UK 6:45pm - - - High

FOMC Member George Speaks US 7:30pm - - - Medium

JOLTS Job Openings US 7:30pm - 5.58M 5.62M Medium

Research Team

Prathamesh Mallya Sr. Research Analyst (Non-Agro Commodities & Currency) prathamesh.mallya@angelbroking.com (022) 2921 2000 Extn :6134

Kaynat Chainwala Research Analyst kaynat.chainwala@angelbroking.com (022) 2921 2000 Extn :6136

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