Views on Commodities, Currencies and Bonds at a Glance
Ahmedabad, 17 April
ENERGY
International and domestic crude oil futures gained on Friday after IEA said that global demand will hit a record high this year on the back of a recovery in Chinese consumption. IEA forecasted in their monthly report record demand in 2023 of 101.9 million barrels per day (bpd), up 2 million bpd on last year. However, they also warned that the output cuts announced by OPEC+ producers risk worsening an oil supply deficit expected in the 2nd half of the year and could hurt consumers and a global economic recovery. Earlier on Thursday, OPEC in its monthly report pointed to downside risks in the summer demand outlook, citing a weaker growth backdrop, tighter monetary policy and instability in the global financial sector. U.S. NYMEX gas futures rose on Friday helped by short covering following the recent slide below the key $2 technical level and forecasts for slightly colder weather than previously expected.
BULLION
International and domestic gold and silver fell sharply on Friday giving up gains from the previous session as the dollar bounced and a Federal Reserve official flagged the need for another interest rate hike. The Federal Reserve could likely increase its benchmark rate in May by another 25-bpss after Fed Governor Christopher Waller said higher borrowing costs are needed to make better progress on the inflation fight. The CME FedWatch tool showed markets were now pricing in a 79.5% chance of a 25 basis-point hike in May compared with a 71% chance at the beginning of the week and 54% chance a month ago.
BASE METALS
COMEX Copper futures retreated on Friday, shrugging off support from tightening inventories as the U.S. dollar bounced and investors took profits from the metal’s 2.6% weekly gain. Data from LME showed that stocks hit their lowest since 2005 on Friday, while inventories in ShFE warehouses Exchange were down 4% last week. However, output from Chile is expected to improve, while demand remains sluggish from China also capped upside.
CURRENCIES
The Indian Rupee appreciated against the Dollar, as cooling U.S.inflation boosted bets that the Fed was nearing the end of its rate-hiking cycle. This also pulled the dollar lower and aided the local unit. The Rupee settled at 81.8500 per dollar compared with 82.0775 in the previous session, gaining by 0.28% on the day. The Federal Reserve could likely increase its benchmark rate in May by another 25-bps after Fed Governor Christopher Waller said higher borrowing costs are needed to make better progress on the inflation fight and also lent support to the greenback.
BONDS
Indian bond yields ended marginally ended marginally higher on Thursday, but were little changed for the week, as debt auction added to supply and continued profit booking offset the impact of lower inflation readings. The 10-year benchmark 7.26% 2032 bond yield ended at 7.225%, after closing at 7.213% on Wednesday. For the week, the yield rose 1 bps, after falling 11 bps last week.
(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.)
