Views on Commodities, Currencies and Bonds (16/3/23)
ENERGY
International and domestic crude oil futures tumbled on Wednesday’s trade on concerns that a crisis in the banking sector could trigger a recession and cut demand. • NYMEX WTI fell over 5%, Brent crude oil prices tumbled over 4%, while domestic crude oil futures fell over 7% on Wednesday. • Adding to the bearishness in the market, data from EIA showed U.S. crude stockpiles rose by 1.6 million barrels last week. • Capping downside was a slightly bullish report from IEA who said that global oil demand will rise in 2023 by 2 million bpd to 102 million bpd supported by a resumption of Air travel and rising demand from China. • At the same time, they added that currently global supply is outstripping lackluster demand due to rise in global stocks. • U.S. NYMEX Gas and domestic futures tumbled on Wednesday’s trade pressured by a broader sell-off across financial markets. • Expectations for lower heating demand also weighed on prices.
BULLION
International gold and silver ended mixed on Wednesday with gold ending stronger and silver ending weaker. • Gold found support amid safe haven appeal as investors shifted expectations for central banks’ plans for interest rates due to the stress in the market. • The fall in the U.S. bond yields reflected the situation. • Fears of a broader financial crisis intensified after a big fall in Credit Suisse stock prices. • However, the Dollar rebounded on Wednesday and capped upside.
BASE METALS
COMEX and MCX Copper prices fell on Wednesday as a stronger dollar dented buying appetite. • Base metal sector was also shaken by fresh banking sector concerns after a big fall in Credit Suisse stock prices. • However, hopes of a demand recovery from China capped further weakness.
CURRENCY
The Indian Rupee gave up its gains and ended weak against the Dollar on Wednesday, on dollar demand from foreign banks and importers. • The local unit slipped below 82.5000 and settled at 82.5950 to the dollar, compared with 82.49 in the previous session. • The local currency had opened at 82.31. • Most EM and Asian peers were marginally stronger and fared better compared to the local unit. • However, the dollar index surged higher on Wednesday afternoon session and weighed on local unit. • Meanwhile, India’s merchandise trade deficit in February stood at $17.4 billion, data released on Wednesday showed. That was marginally lower than the $17.8 billion recorded in the previous month, and below the $19 billion forecast in a Reuters poll. • In the overseas markets, the U.S. Dollar Index surged higher on Wednesday’s trade on safe haven buying as Credit Suisse sparks wider banking fears. • The Euro and the Sterling tumbled against the greenback while the Yen gained against the greenback on Wednesday on safe haven buying.
BONDS
Indian bond yields ended marginally lower on Wednesday, even as elevated inflation shifted focus back on interest rate hikes by U.S. and Indian central banks in the coming days. • The 10-year benchmark 7.26% 2032 bond yield ended at 7.363%, after closing higher at 7.378% on Tuesday. • U.S. bond yields tumbled on Wednesday’s trade after problems at Swiss banking giant Credit Suisse fueled fears about the impact of rising yields on the global banking sector. • The yields also fell after U.S. data showed signs of economic weakness along with cooling inflation.
(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.)
