Ahmedabad, 21 April


International and domestic crude oil futures fell over 2% on Thursday dragged lower by fears a possible recession which could dent fuel demand.  Oil prices have now to levels of late March when a surprise OPEC+ production cut announcement fuelled bullish sentiment among investors.  Weak gasoline demand also weighed on prices. Implied gasoline demand fell 3.9% from year-ago levels to 8.5 million barrels a day.  U.S. NYMEX and MCX gas futures gained on Thursday as cold weather conditions expected to aid demand.  The price rise came despite data from EIA showing utilities adding 75 billion cubic feet of gas to storage last week compared to the 69-bcf build analysts forecast and compares with an increase of 47 bcf in the same week last year.


International and domestic gold and silver gained on Thursday as the dollar and Treasury yields pulled back after soft U.S. economic data strengthened the case for a pause in interest rate hikes by the Fed.  Weekly U.S. jobless claims edged up last week, suggesting the labour market was gradually slowing, while another set of data showed fewer existing home sales and much lower-than-forecast factory activity in the Philadelphia.


COMEX and MCX Copper futures fell on Thursday on uncertainty over further U.S. rate hikes and a sluggish recovery of demand in China.  Federal Reserve Bank of New York President John Williams said that inflation was still too high and the U.S. central bank would take measures to lower it.  Reflecting weak imported demand, the Yangshan copper premium was at $27.50 a tonne, down 45% from nearly 5 weeks ago.


The Indian Rupee appreciated against the Dollar on Thursday tracking gains in the Asian peers.  The Rupee settled at 82.1475 per U.S. dollar compared with 82.2250 in the previous session, having weekend around 0.45% over the past 3 days.  The Chinese Yuan, the South Korean Won, and the Philippine Peso led the Asian peers as the dollar index took a breather on Thursday.  However, gains were capped amid growing expectations that major central banks across the globe will keep raising interest rates in the near-term to curb stubbornly high inflation.  Meanwhile, RBI MPC meeting minutes showed that the central bank has hinted towards the possibility of more rate hikes ahead.  The minutes showed that the members believed that status quo on the policy rates in April was tactical and not a pivot or a change in policy direction and they continue to believe that fight against inflation is far from over.  In the overseas markets, the U.S. Dollar Index eased on Wednesday’s session after as weak data backs US recession view supporting the outlook that the Fed could pause in June after another expected rate hike next month.  The Euro gained against the greenback after ECB’s meeting in March suggest there is a growing divide within the Governing Council.  The meeting also suggested that a 50-bps rate hike is still on the table next month but the split among members argues in favour of a 25-bps compromise.


Indian bond yields ended flat to marginally weaker ahead of the crucial minutes of the Reserve Bank of India’s latest policy meeting.  The 10-year benchmark 7.26% 2032 bond yield ended at 7.220%, after closing at 7.227% on Wednesday.  U.S. Bond yields fell on Thursday after soft U.S. economic data supported the outlook that the Fed could pause in June after another expected rate hike next month.

(report by: 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.)