Views on Commodities, Currencies and Bonds
Ahmedabad, 29 March
ENERGY
International crude oil futures gained on Tuesday on supply disruption risks from Iraqi Kurdistan and hopes that banking sector turmoil is contained. The Dollar extended losses on Tuesday and also lent support to oil. Domestic crude oil futures also rose over 1% tracking overseas prices, but a stronger Rupee capped upside. Meanwhile, after market U.S. hours data from API showed crude stocks fell by about 6.1 million barrels in the week ended March 24. On the product side, gasoline inventories fell by about 5.9 million barrels, while distillate stocks rose by about 550,000 barrels and pulled heating oil futures lower. U.S. NYMEX Gas futures fell on Tuesday to a 30-month low on rising output and mild weather forecasts. This will allow utilities to start injecting gas into storage at the beginning of April.
BULLION
International gold and silver futures rebounded from Monday’s low and ended Tuesday up by 1% drawing support from a weaker U.S. dollar and weak equity markets. However, the U.S. Treasury Yields gained further on Tuesday and capped downside. Doubts emerged that the Fed will be able to tighten policy any further. According to the CME FedWatch tool, markets have slowly pricing in 57% chance of 25 bps hike and 42% chance of status quo in May. Domestically, gold and silver futures also gained on Tuesday, tracking overseas prices. Upside was capped as the Rupee remained strong.
BASE METALS
COMEX and MCX Copper prices rose on Tuesday as the dollar continues to remain subdued. Furthermore, the dollar remained subdued and also lent support. Prices also gained as a deal to buy the assets of Silicon Valley Bank improved risk appetite.
CURRENCY
The Indian Rupee appreciated against the Dollar on Tuesday’s session as risk appetite improved as investors grew hopeful that the banking crisis will be contained. The Rupee settled at 82.1875 to the dollar, up from 82.3700 in the previous session. The Rupee also got a boost from the carry return of running short dollar positions on account of the upcoming change in the fiscal year. Most Asian currencies also appreciated against the dollar, while European shares gained as confidence returned to the global markets after reports suggested that First Citizens BancShares would acquire the deposits and loans of Silicon Valley Bank. However, gains were capped as importers may have taken advantage of a gaining currency. In the overseas markets, the U.S. Dollar Index fell against the basket of currencies on Tuesday as returning confidence in the global banking sector weakened demand for the greenback. The Euro, the Sterling and the Yen gained against the dollar on Tuesday.
BONDS
Indian bond yields rose on Tuesday as heavy bond sales from states weighed on sentiment. Indian markets also tracked the gains in the U.S. peers. The 10-year benchmark 7.26% 2032 bond yield ended at 7.321%, after closing at 7.312% on Monday. U.S. bond yields rose on Tuesday, but were off session highs after the Treasury Department saw solid demand for an auction of five-year notes. The Treasury sold $43 billion in five-year notes at a high yield of 3.665%, with demand for the debt was 2.48 times the amount on offer.
(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.)
