Ahmedabad, 11 April
International and domestic crude oil futures settled lower on Monday as concern about further interest rate hikes that could curb demand outdid the prospect of a tighter market due to supply cuts from OPEC+ producers. The U.S. Dollar also rebounded on Monday’s session and kept upside capped. U.S. NYMEX and domestic gas futures rebounded over 7% on Monday’s session on short covering. The market could see high volatility in the near term, given the lack of clear triggers.
International and domestic gold and silver fell on Monday’s session tracking a recovery of the dollar and the benchmark bond yields. Prices fell after the payrolls report continued to point to a tight labour market leading to speculation that the Fed delivering another 25bps increase in the fed funds rate in May. Key European markets were shut on Monday, so volumes remained low. However, investors also booked profits after the recent uptick and pulled prices lower.
COMEX and MCX Copper fell on Monday’s session tracking a recovery in the dollar. US Federal Reserve officials repeatedly sent hawkish signals, growing market expectations for the Fed to raise interest rates and weighed on prices. However, LME was shut on Monday, so volumes remained low. ShFE copper and aluminium gained on Monday’s session. Copper inventory across major Chinese markets fell 7,600 tonnes from last Friday to 194,700 tonnes and lent support. Domestically, aluminium, lead and zinc ended marginally in the green on Monday.
The Indian Rupee depreciated against the Dollar on Monday, tracking Asian peers after last week payrolls report continued to point to a tight labour market leading to speculation that the Fed delivering another 25bps increase in the fed funds rate in May. The Rupee settled at 81.9800 per U.S. dollar compared with 81.8850 in the previous session. Additionally, importer-led dollar demand also limited gains after the local unit had brief tested an intraday high of 81.7800. At the same time, inflows into the domestic equity markets have capped losses. Foreign investors turned net buyers of Indian equities in April. Meanwhile, the USD/INR forward premiums continued their decline since the RBI held the policy rate steady last Thursday, with the 1-year implied yield down a further 7 bps to 2.41%. Key trigger for the domestic markets will be India’s IIP and inflation number this week. In the overseas markets, the U.S. Dollar Index gained on Monday on Fed rate hike bets after last week’s solid jobs report. The Euro weakened against the greenback on Monday, tracking a solid recovery of the greenback. The Yen tumbled against the dollar on Monday after Japan’s new central bank governor said it was appropriate to maintain the bank’s ultra-loose monetary policy for now as inflation has yet to hit 2%. This would suggest that BoJ will continue its massive stimulus.
Indian bond yields edged higher on Monday as traders continued to book profits and a rise in U.S. yields. The 10-year benchmark 7.26% 2032 bond yield ended at 7.231% after closing at 7.219% on Thursday. U.S. bond yields ended higher on Monday as investors continued to price in a 25 bps hike by the Fed in May following a slightly strong U.S. jobs report.
(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.)