Crude commodity market Trading as per major global update, IMF yesterday said economic growth in the US which was aiding a helping hand to the global economy as other major economies still remained under doldrums was getting weaker as equated to IMF’s own forecast a couple of month back. It added, some financial markets may be overheating backed by sustained period of near-zero rates which pushed the major equity markets globally down with the US lading around 1.5percentage yesterday. The agency, trimmed its global growth forecast to 3.3percentage for 2013 as compared to 3.4percentage earlier whereas reduced the next years forecast too. In other commodity related developments which further weighed oil were expectations over increase in crude inventories with continued drop in refinery utilization rate. As per Bloomberg survey, crude stocks likely increased by 2 million barrels last week. Though moderate increase was anticipated in terms of products side, overall bias continues to be weaker. If we look at the API stocks report released today morning (IST); news repts showed huge build in crude inventories by 5.1 million barrels adding to negative pressure on the commodity. There are no major data points to be watched on the economic side today though the late night FOMC minutes for Sept 16-17 meeting might create good volatility in commodities and equities alike. On crude, weaker equities and largely stable to negative expectations from inventory report would continue to push the commodity lower. With the EIA too in its STEO report cutting price and demand forecast for the commodity in medium-term, we feel overall trade would continue to be lower.
Global Market View: In today’s morning session, Asian markets are trading on a negative note tracking the negative US markets. S&P 500 closed at 1935.10 down by 1.51 percent as markets are feeling jittery about the earning season that is to begin this week while IMF’s global economic growth forecasts too hurting equities. SGX Nifty is trading on a negative note down by 28.00 points in early trade this morning, indicating a continuing weakness in today’s session as well Dollar index has declined after weeks of appreciation as markets feel nervous about the results season, and is currently trading at 85.79. Euro is trading on a marginally positive note to the dollar in the morning session at 1.2634, and Pound too is currently trading on an appreciating note at 1.6064.
Economic data: No major data except by the FOMC’s meeting minute is scheduled.
We had maintained bearish bias in the commodity on expectations that warmer to largely normalized temperatures were seen in much of US Western and North-Central region which might continue to keep demand for the commodity subdued in coming days As per Bloomberg news, WSI Corp earlier said temperatures would be mostly normal or higher than usual in the lower 48 states from Oct. 11 through Oct. 15. On additional negative note, EIA in its STEO said, Households relying on NG will see heating costs drop 4.6percentage to $649 as compared to previous winter. Continued higher supplies are expected to keep a lid over the commodity in coming winter. We hold moderate selling bias in the commodity today. Natural gas prices are taking us on a ride with the commodity witnessing wide fluctuations in intraday movement with or without the same developments over weather. After a big over 3.5percentage drop in NG on Monday, we saw November expiry contract advanced 1.5percentage to $3.96 per MMBTU whereas in MCX NG added 1percentage to Rs 243.5 mark.
Sell Gold Mcx Dec below 26860 SL 26960 Tgt 26650
Sell Silver Mcx Dec below 38410 SL 38800 Tgt 37850