CPI Ex Food, Energy and Commodity Trading Tips

Crude Commodity Trading as per major updates, API inventory number released early today morning showed rise in crude inventories by 1.2 million barrels, which was lower than markets estimates. Products did saw modest decline mainly the gasoline stocks which fell by 500,000 barrels through Oct 17, Bloomberg news showed. For more important DoE inventory data to be released today evening (IST), estimates call for a rise in crude stocks by 3 million barrels whereas products stocks are seen sliding with gasoline stockpiles likely fell by 1.45 million barrels. Total gasoline stocks in the US are seen diving down towards 204.2 Mln barrels, its lowest since November 2012. While rising crude stocks and moderate fall in products inventories even out each other, we are not expecting inventory numbers to be the major mover today. If we talk about other major developments, very strong increase in US equities which is driving similar gains in Asia is seen supporting the optimism in industrial commodities including oil. Herein yesterday’s better hinnies GDP number and firm US housing data is also seen supporting. Oil prices broadly are taking a pullback after last week sliding to multi-year lows and moving in a technically bear market territory as equated to 2014 highs. Though overall bias still stays weak, we feel it may see some more gains for a few sessions before the prior trend regains its hold back. For intraday, we recommend buying the commodity on small dips.

Global Market View: In today’s morning trade all the Asian equity markets are trading on a positive note tracking the positive close of the US equity markets. Markets globally have been gaining traction lately with anticipation that ECB stimulus would fuel excess liquidity in the financial system, compensating the vacuum created by the FED. S&P 500 closed at 1941.28 up by almost 2 percent yesterday buoyed by ECB expectations and better than expected results from Apple inc. SGX nifty is trading on a positive note up by 1 percent indicating a positive session before the markets close for the Diwali Holidays. In terms of currency, Asian currencies are trading on a marginally positive note with respect to the dollar. US dollar index has appreciated yesterday. Euro and Pound have depreciated with respect to the dollar, and are currently trading at 1.2724 and 1.6124 respectively. Economic data that is to be released from European union and Germany would play in major factor in the international currency markets, as speculation about further stimulus from the ECB has been driving that markets since yesterday. Any change from expectation towards the brighter side could change the trend in the European currency. From the US have the CPI number to be watched.

Though broader weather related updates remained same in the commodity we saw strong gains yesterday probably led by a technical pullback as also said yesterday after the commodity moved to 11 month lows in the earlier session yesterday. As we said earlier, Natural Gas weather said it is expecting cool air will sweep through Midwest and Northeast in the coming week driving moderate heating demand however rest of the US will be relatively comfortable with limited demand for heating or cooling for most part of the week. Inventory numbers too suggest additions which are likely to keep the overall trend still down. We maintain selling bias in the commodity.

Commodity Trading Tips

Buy Nickel Mcx Oct above 923 SL 910 Tgt 950

Sell Lead Mcx Oct below 123.50 SL 124.50 Tgt 122.50