Views on Commodities, Currencies and Bonds at a Glance
Ahmedabad, 28 April
ENERGY
International crude oil futures trimmed losses from the previous session and ended higher on Thursday, after Alexander Novak said global oil markets were balanced. At the same time, he said OPEC+ does not see the need for further oil output cuts. However, gains were limited as data showed U.S. growth slowed more than expected in the Q1 despite resilient labour conditions that suggested more rate hikes to tame inflation. Additionally, signs of tightening U.S. supplies also helped to balance fresh concerns over a slowing U.S. economy. U.S. NYMEX Gas June futures gained by 2% on Thursday on rising LNG exports. Refinitiv data showed U.S. LNG export plants rose to 14.0 bcfd so far in April, up from a record 13.2 bcfd in March. The price drop came despite a slightly bigger-than-expected storage build last week. Data from EIA showed, utilities added 79 bcf of gas into storage during the week ended April 21 and was bigger than the 75-bcf build forecast.
BULLION
International and domestic gold and silver prices ended flat on Thursday. Prices initially were trading in the green as the dollar remained subdued. However, prices gave up gains in the evening session as markets focused on the above-forecast inflation number and shrugged off weaker U.S. economic readings. Core PCE prices grew by a hotter-than-expected 4.9% in the quarter even as data showed the U.S. economy grew by an annualized 1.1% in Q1 2023, slowing from a 2.6% expansion in the previous quarter and missed market expectations of a 2% growth.
BASE METALS
COMEX Copper futures rebounded from session lows and ended marginally stronger on Thursday as gains in U.S. stocks on the back of strong earnings encouraged buying of other risky assets. Prices fell initially after investors focused on the inflation element of U.S. economic data on Thursday, which was higher than expected, prompting gains in the U.S.dollar index. Prices also remained under pressure earlier in the day after data on Thursday also showed that profits at Chinese industrial companies fell 19.2% in March, reflects that China’s recovery from COVID-19 is gradual. Refinitiv news reported that Chinese companies that make copper products are cutting output for the 2nd quarter, typically the peak demand season, because of a slower than expected recovery in consumption after COVID-19 and sluggish exports.
CURRENCIES
The Indian Rupee gave up gains made in the morning session and ended the session on a weaker note The currency reversed its dollar inflow-led gains amid mixed Asian peers and some short covering before market close. Investors also turned cautious ahead of the U.S. GDP data in the evening session and kept gains capped. The Rupee settled at 81.8375 per dollar after testing an intraday high of 81.6200, Wednesday’s close was 81.7650. Initially, dollar inflows related to IPO’s listing and a private equity deal had supported the gains. In the overseas markets, the U.S. Dollar Index rebounded from session lows after investors focused on the inflation element of U.S. economic data on Thursday, which was higher than expected. Core PCE prices grew by a hotter-than-expected 4.9% in the quarter even as data showed the U.S. economy grew by an annualized 1.1% in Q1 2023, slowing from a 2.6% expansion in the previous quarter. The Sterling gained against the greenback, while the Euro and the Yen remained weak on Thursday.
BONDS
Indian bond yields ended marginally lower on Thursday as traders awaited fresh supply via the debt auction and for the U.S. Federal Reserve’s policy decision next week. The 10-year benchmark 7.26% 2033 bond yield ended at 7.097%, after closing at 7.116% on Wednesday. In the overseas markets, U.S. 10-year benchmark rose on Thursday after economic data suggesting inflation could remain sticky an could prompt the Fed to remain hawkish on future rate hikes. The U.S. House of Representatives narrowly passed a bill that would raise the debt limit in exchange for sweeping spending cuts. The bill will move to the U.S. Senate for a vote.
(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.)
