ENERGY, BULLION, BASE METAL AND CURRENCY MARKET OUTLOK (9/3/3/23)
International and domestic crude oil prices extend losses on Wednesday as tighter financial conditions could lead to a U.S. recession in turn denting demand from the fuel. • The U.S. Dollar gained marginally and also kept upside capped. • Some support came after data showed that U.S. crude inventories fell 1.7 million barrels last week, compared with analyst estimates for a build of 395,000. • However, demand concerns persisted after U.S. gasoline stocks witnessed a smaller draw of 1.1 million barrels, compared to 1.8 million forecast, while, distillate inventory grew by 138,000 barrels, compared with expectations for a 1 million-barrel draw. • U.S. NYMEX Gas and MCX futures fell on Wednesday to a 1-week low, after data showed the amount of gas flowing to Freeport LNG’s export plant in Texas dropped. • According to Refinitiv, the freeport plant was on track to pull in just 0.1 bcfd of gas on Wednesday, down from 1.0 bcfd on Tuesday.
BULLION
International gold and silver extended losses on Wednesday’s session as Powell sticks to hawkish narrative. • The dollar also hovered near multi-month highs and weighed on prices. • Data showed that the US unexpectedly created 242K jobs in February of 2023, well above an upwardly revised 119K in January and market forecasts of 200K. • Upbeat data will reinforce expectations that Fed could remain hawkish on future rate hikes and will continue to weigh on bullion prices.
BASE METALS
COMEX and MCX Copper rose on Wednesday’s recovering after two days of decline amid signs of limited supply. • However, mines in Peru are starting to transport their copper concentrate to ports for export after 3 months of protests that slowed down shipments. • Among other metals aluminium rose on Wednesday even as talks emerged that production cuts in the Yunnan province in China could improve. • Meanwhile, investors adjusted for the prospect of higher rates for longer after Federal Reserve Chairman Jerome Powell’s comments over Tuesday and Wednesday.
CURRENCY
The Indian Rupee weakened against the dollar on Wednesday amid worries over the U.S. interest rate outlook. • However, losses were capped by exporters and speculators selling dollars. • The Rupee settled at 82.0550 to the U.S. dollar, down from 81.9100 in the previous session. • The local currency had fallen to an intraday low of 82.2900. • Meanwhile, the Korean won, and Malaysian ringgit depreciated by more than 1% each, while the Indonesian rupiah weakened by 0.6% on Wednesday, following hawkish comments by U.S. Federal Reserve Chair Jerome Powell. • The rupee forward premiums fell, tracking an overnight jump in U.S. yields with the 1-year implied yield fell 6 bps to 2.12%. • In the overseas markets, the U.S. Dollar Index ended flat to marginally higher on Wednesday as traders wait on jobs data. • Downside was capped as fed Chair Powell sticks to hawkish narrative. • The Euro ended flat to weaker, while the yen too ended weaker on Wednesday. • The Sterling rebounded from lows and ended stronger on Wednesday as investors awaited fresh triggers.
(Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities)
(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing.)
(સ્પષ્ટતા: અત્રેથી આપવામાં આવતી તમામ પ્રકારની માહિતી કોઇપણ પ્રકારે રોકાણ, ટ્રેડીંગ માટેની સલાહ નથી. બજારોમાં રોકાણ જોખમોને આધીન છે અને રોકાણ કરતા પહેલા કૃપા કરીને તમારા સલાહકારની સલાહ લો.)
