Unemployment Rate and Commodity Trading Tips

Crude Oil the US Jobless claims numbers was an important data point yesterday, where better data raised hopes of a similar positive reading in the monthly Jobs data to be released this evening. Unemployment claims slipped by 26,000 last week to 323,000, falling to a lower number since November last year. On to the monetary policy front, we saw a huge uptick in the euro, which pushed the dollar firmly lower to 80, additionally boosting crude oil prices in intraday trade today. There was also ongoing uncertainty in about the developments in Ukraine, which also added to the prices’ up move.

While yesterday’s trend was completely distorted compared to the normalized move in the crude oil markets, our oil prices finished on a weaker note. It should be noted that almost all of the gains in the international markets came in after closing of the MCX platform. Crude prices closed with a gap down of 2.5% to Rs 6118 per barrel, near its weakest point of the day. With WTI managing its gains of over $1.5 per barrel, its impact along with the Rupee is likely to be felt at the opening time today.

Overall though, we continue to hold a bearish stance on the commodity as demand for the black liquid continues to reduce as the US enters its lean demand phase. Meanwhile, we are also not expecting any major positivity from the US Jobs data this evening. We recommend selling the commodity today from higher level

Global market analysis: There had been a strong turnaround last evening post ECB president signaled that deflation risks in the euro region are easing. The impact was strongly visible in the global markets. The euro currency rose substantially to $1.3873 up by 1%. Its effect was at least evidently visible on USD and the gold commodity. At present the USD index is trading at 79.66 and the gold is at $1350. In a way it has spoiled the whole weekly performance in just few trading hours. We are going to see another tough day today as in one side the positive effect of euro might sidetrack the market while from the US we have the non-farm payroll numbers which generally produce huge volatility in most of the asset classes. Inevitably we are going to see a precarious move in all asset classes. Today we have the economic releases from Germany in the form of Industrial production while the wholesale price index may also advance. However, as we proceed to the US session certainly there would be huge volatility ahead of employment data. We believe these data are expected to be modestly negative for the economy as we believe the actual numbers might come lower than the market survey.

Coming to crude oil, WTI April futures which fell close to $100 mark rebounded sharply last with the euro news, falling USD and risings stocks. This morning it is trading at $101.83 and believe that it would a little tough to take a stance on crude oil while possibly the trend may be on the lower side. We suggest selling with strict stop loss.

Commodity Trading Tips

SELL CRUDE OIL MCX MAR NEAR 6210-6220 SL 6265 TGT 6140

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