Chinese Manufacturing Data will Boost to Crude

Crude oil for the most active December expiry at the NYMEX tumbled after the weaker-than-expected weekly inventory data from the US, whereas the lack of any major economic data and subdued trade across the western equity indices also weighed on the commodity’s movement. At closing, the WTI December expiry stood at 96.85 per barrel, its four-month low and, the domestic markets saw a lesser drop of 0.70% to Rs 6017 per barrel. Lower losses in our markets are backed by the fact that the markets expected the rupee to see extended depreciation on Thursday morning.

In important oil-related cues from the US yesterday, the department of energy said that crude stockpiles rose by 5.2 million barrels for the week ended October 18 against markets estimates of a rise of near 3 million barrels. Separately, gasoline stockpiles fell by 1.8 million barrels whereas distillate stocks added 1.5 million barrels, both of which failed to provide much direction to the oil price movement. In other related news, which plays a part on the WTI was the crude stockpiles for Cushing, the delivery point for WTI which saw inventories advancing around 358,000 barrels, its second such back-to-back increase after the continued decline in the last couple of months.

In other market cues, the US market posted a negative closing yesterday and therefore, the entire Asian markets this morning are trading in the red. In major currencies, the dollar continues to drop against majors while the euro is trading positive against almost all of its 16 cross pairs. As far as today is concerned, we have few economic data from Germany and the euro-zone, which are likely to come in better than expected and might help the euro remain positive. Likewise, we have a few data releases from the US which are likely to be on a negative note and could further pressure the US dollar. In the rupee space, while the opening has changed little, the overall weakness in the US Dollar and the positivity in the euro is likely to support the rupee during the day. In the afternoon session, the bullish data from the euro-zone could further support the rupee against a major drop and eventually weigh on the movement in MCX Non-Agricultural commodities, as well as oil.

For crude, there are no major developments during the early morning trade today, though prices are taking some positivity out of the better than expected Chinese manufacturing data. Early today, HSBC and Markit reported, Chinese Manufacturing PMI for the month of October is seen improving to 50.9 as against last month’s reading of 50.2 which is supporting oil prices .Nevertheless, amidst the broad weakness in the commodity and post the yesterday’s stocks data.

TODAY STOCK MARKET TIPS

BUY CRUDE OIL MCX NOV NEAR 6030 SL 5998 TGT 6070

BUY NATURAL GAS MCX OCT ABOVE 225 SL 222 TGT 228

ECONOMIC INDICATORS:

DATE TIME Region Indicator Period Survey Prior
24.10.2013 05:20 JN Japan Buying Foreign Bonds Oct-18 ¥380.7B
24.10.2013 05:20 JN Japan Buying Foreign Stocks Oct-18 ¥116.4B
24.10.2013 05:20 JN Foreign Buying Japan Bonds Oct-18 -¥186.5B
24.10.2013 05:20 JN Foreign Buying Japan Stocks Oct-18 ¥143.6B
24.10.2013 07:15 CH HSBC/Markit Flash Mfg PMI Oct 51.2
24.10.2013 13:00 GE PMI Manufacturing Oct A 51.3 51.1
24.10.2013 13:00 GE PMI Services Oct A 53.6 53.7
24.10.2013 13:30 EC PMI Manufacturing Oct A 51.5 51.1
24.10.2013 13:30 EC PMI Services Oct A 52.2 52.2
24.10.2013 13:30 EC PMI Composite Oct A 52.3 52.2
24.10.2013 18:00 US Initial Job Claims Oct-18 358K
24.10.2013 18:00 US Continuing Claims Oct-11 2895K
24.10.2013 19:30 US New Home Sales Sep 425K 421K
24.10.2013 20:30 US Kansas City Fed Manf. Activity Oct 2
24.10.2013 10/28 GE Import Price Index MoM Sep 0.20% 0.10%

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