Views on Commodities, Currencies and Bonds at a glance
Ahmedabad, 18 April
ENERGY
International and domestic crude oil futures gave up all its gains on Monday made in the previous session as the dollar rebounded and interest rate concerns. • Markets are betting the Fed will raise its lending rate in May by another quarter of a percentage point and have pushed out to late this year expectations of a rate cut. • Data from CFTC showed, money managers raised their net long U.S.crude F&O positions by 22,428 contracts to 187,886 in the week to April 11. • Data from Baker Hughes showed, oil rigs fell by two to 588 last week. • U.S. NYMEX and MNC gas futures surged higher on Monday on forecasts for cooler weather and more heating demand over the next two weeks than previously expected. • Additionally, Refinitiv data showed Freeport LNG’s export plant was on track to pull in about 2.2 billion cubic feet per day of gas on Monday, which was above the 2.1 bcfd of gas Freeport LNG can turn into LNG for export.
BULLION
International and domestic gold and silver extended losses on Monday with gold futures briefly breaking below the $2000 per ounce level pressured by a stronger dollar and higher Treasury yields. • Prices also fell as markets have pushed out to late this year expectations of a rate cut. • Initially, markets were factoring in a rate cut as early as July. • Prices also fell as investors may have been booking profits, at least in the domestic side of things after the recent spike.
BASE METALS
COMEX and MCX Copper futures extended losses on Monday pressured by a stronger dollar. • Most other metals also remained weak on Monday, with the exception of Tin. • Tin prices on LME surged higher as news of a mining ban in Myanmar, a major producer of the soldering metal, fuelled worries about shortages.
CURRENCIES
The Indian Rupee ended weaker on Monday as the dollar recovered after some March retail sales components were not as weak as the markets had feared. • The Rupee settled at 81.9725 per dollar, compared to its previous close of 81.8500. • However, the currency moved in a narrow 10 paisa range through the session as investors await fresh data which could determine the path of the Fed’s rate. • Meanwhile, the USD/INR forward premiums fell, with the 1-year yield down to a one-month low of 2.30%. • Asian currencies fell across the board, with the South Korean won leading losses and also weighed on sentiments even though the Rupee fared better in this Monday’ssession. • The currency had strengthened last week as foreign investors turn net buyers of Indian equitiesin April. • However, the Reserve Bank of India may have been present over the past few days to mop up dollar inflows reflected by rise in FX reserves, has kept the rupee from strengthening further. • In the overseas markets, the U.S. Dollar Index rose on Monday after New York state factory activity in April increased for the first time in five months, boosted bets that the Fed will raise interest rates in May.
BONDS
Indian bond yields ended higher on Monday tracking a rise in U.S yields in anticipation of another rate hike by the U.S. Fed in May. • The 10-year benchmark 7.26% 2032 bond yield ended at 7.247%, after closing at 7.229% on Friday. • U.S. bond yields rose on Monday as investors watched Fed speakers for any new guidance on whether the U.S. central bank is likely to stop hiking rates after an expected increase in May.
(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.)
