Views on Commodities, Currencies and Bonds
Ahmedabad, 12 April
ENERGY
International and domestic crude oil futures settled higher on Tuesday buoyed by prospects of tighter global supplies. Prices also rose on Tuesday on speculation that the fed could ease up on further rate hikes after the U.S. inflation data. However, weaker Chinese demand capped further upside after sluggish inflation data from the country. Meanwhile, after U.S. market hours data released from API showed crude stocks rose by about 380,000 barrels while gasoline inventories rose by about 450,000 barrels, while distillate stocks fell by about 2 million barrels. Meanwhile, EIA in the STEO report said that Brent prices could average at $85 per barrel, up by $3, after OPEC producers cut output. However, future output from OPEC and non-OPEC producers will rise in 2024, which could keep the market balanced. U.S. NYMEX gas futures extended gains on Tuesday’s session but upside remained capped on higher supply and a milder weather outlook. Meanwhile, the EIA in their STEO report said dry gas production will rise to 100.87 billion cubic feet per day in 2023 and 101.58 bcfd in 2024 from a record 98.11 bcfd in 2022.
BULLION
International and domestic gold and silver rebounded on Tuesday’s session as the Dollar remained under pressure ahead of the U.S. inflation data. However, the benchmark U.S. Treasury Yields continued to gain on Tuesday and capped further upside.
BASE METALS
COMEX and MCX Copper gained on Tuesday’s session tracking a fall in the dollar. However, Chinese data signalled weak economic activity and capped gains. China’s consumer price inflation hitting an 18-month low and factory gate prices falling at the fastest pace since June 2020 suggested sluggish activity and demand.
CURRENCY
The Indian Rupee weakened against the Dollar on Tuesday on likely corporate outflows and importer demand for the greenback. The Rupee settled at 82.1250 to the dollar, having tested an intraday low of 82.1500 during the session. It closed at 81.9800 in on Monday. Most Asian peers were stronger against the greenback as the dollar remained subdued ahead of crucial inflation number and FOMC meeting minutes and capped losses. Meanwhile, the USD/INR premiums dipped more, with the 1- year implied yield now at 2.37%. In the overseas markets, the U.S. Dollar Index fell on Tuesday as investors waited on inflation data. New York Fed President John Williams said on Tuesday that the prospect of the Fed raising its benchmark interest rate only once more and in a 25-bps hike is a useful starting point but the central bank’s policy path will depend on incoming data. The Euro and the Sterling gained against the greenback on Tuesday, tracking a fall of the greenback. The Yen remained weak against the dollar on Tuesday as new Bank of Japan Governor signalled there would be no significant changes to monetary policy.
BONDS
Indian bond yields fell on Tuesday as traders waited for domestic, as well as U.S. inflation data due later in the week to gauge the future interest rate trajectoriesin both countries. The 10-year benchmark 7.26% 2032 bond yield ended at 7.222% after closing at 7.231% on Monday. U.S. bond yields ended higher on Tuesday in a choppy trading session as investors awaited the highly anticipated U.S. inflation report that should determine the future path of interest rates.
(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.)
