Commodity Weekly Report Ways2Capital 20 April 2015


Posted April 22, 2015 by ways2capital

Indian economy to grow at 7.3% in 2015: Moody's Analytics: Indian economy is expected to grow marginally higher at 7.3 percent during the year compared with 7.2

 
✍ MCX - WEEKLY NEWS LETTERS
✍ INTERNATIONAL NEWS
✍ Indian economy to grow at 7.3% in 2015: Moody's Analytics:
Indian economy is expected to grow marginally higher at 7.3 percent during the year compared with 7.2 percent in 2014 and interest rate cuts will buttress private sector spending, said a group company of global rating agency Moody's.

"Our tracking model suggests that first quarter GDP growth is tracking around 7.3 percent , a slowdown from prior quarters. But we expect this softness will prove temporary with improving domestic demand to help India's GDP grow 7.3 percent for all of 2015,"
International Monetary Fund projected that India will overtake China as the fastest growing emerging economy in 2015-16 by clocking a growth rate of 7.5 percent , helped by its recent policy initiatives, pick-up in investments and lower oil prices.

World Bank too has similar GDP growth forecast for India for the current fiscal year. India's economy is on a cyclical upswing and forward-looking indicators suggest domestic demand is gathering momentum.

China's economic growth slows to 7% in Q1, six-year low:
China's economy grew 7.0 percent in the first quarter, as expected but still its slowest rate in six years, reinforcing bets that policymakers will take more steps to bolster growth. Economists polled by Agency had expected China's gross domestic product (GDP)to rise 7.0 percent in January-March compared with a year ago.
In the last quarter of 2014, China's economy grew 7.3 percent on an annual basis. On a quarterly basis, economic growth slowed to 1.3 percent between January and March after seasonal adjustments, the National Bureau of Statistics said on Wednesday, compared with growth of 1.5 percent in the previous three months.

Factory output climbed 5.6 percent in March from a year ago, below forecasts for a 6.9 percent gain. Fixed-asset investment, a vital driver of the economy, rose 13.5 percent compared with the same month last year. Analysts had expected a rise of 13.8 percent. Retail sales expanded 10.2 percent compared with expectations for a 10.9 percent gain. The disappointing data supports analysts' predictions for China's economic growth to slide to 7 percent this year, the lowest in a quarter of a century.

Two big risks for emerging world: World Bank president:
The impact of lower commodity prices on big emerging market exporters and the prospects of higher interest rates in the United States present major risks to the developing world, Dr Jim Yong Kim, president of the World Bank Group.
"What we're saying to the developing markets is you've really got to now get serious about structural reforms," he said in an interview on "Squawk on the Street." Prospects are low for Latin America this year, and Russia, Brazil and Nigeria are creating drag on the global economy in the face of lower oil prices and a broader decline in commodities, he said.
A rate hike by the Federal Reserve expected to come later this year could also create headwinds, Kim said. In the past, tighter monetary policy in the United States has negatively impacted emerging markets because investors rein in money as capital becomes more expensive.


✍ BULLION
Gold firms near $1,200 but poised for second weekly dip:
Gold firmed around USD 1,200 an ounce on Friday but the metal was headed for its second straight weekly drop, weighed down by speculation over the timing of an interest rate hike by the US Federal Reserve.

✍ FUNDAMENTALS
* Spot gold edged up 0.3 percent to USD 1,200.10 an ounce by 0040 GMT, after dropping 0.3 percent on Thursday. The metal is down 0.6 percent for the week.
* Investors are closely watching US economic data to gauge when the Fed will begin to raise interest rates. Strong data could prompt the US central bank to soon hike rates, a move that could dent demand for bullion.
* However, despite sluggish data and a softer dollar on Thursday, bullion logged in losses on mixed signals regarding the rate hike.
* Data on Thursday showed US housing starts rose far less than expected in March and factory activity in the mid-Atlantic region grew modestly this month, suggesting the economy could struggle to rebound from a soft patch hit in the first quarter.
* There are expectations growth will rebound in the second quarter, but the lukewarm data suggest the momentum will probably not be strong enough for the Federal Reserve to start raising interest rates before September.
* Fed officials on Thursday were at public odds over when the US central bank should start raising rates.
* Physical demand for gold has also been subdued with prices holding near the key USD 1,200 mark.
* Investors will be watching more US data due later in the day and the dollar for trading cues.

✍ MARKET NEWS
* The dollar wallowed at its lowest in over a week against a basket of major currencies early on Friday, having suffered yet another setback overnight in the hands of more underwhelming US economic data.
Silver prices likely to trade negative:
Silver rose 1.5 percent at $16.35 an ounce. Manufacturing activity growth in New York State unexpectedly contracted in April, weakening for a third straight month as the pace of new orders fell to a multi-year low, a New York Federal Reserve survey showed on Wednesday.
The New York Fed's Empire State general business conditions index fell to -1.19 in April from March's 6.90. This was the first negative read for the index since December. Economists polled by Reuters had expected the index to rise to 7.0 this month. A reading above zero indicates expansion.


✍ BASE METAL
Copper hits near 4-week low ahead of China growth data:
* Some Chile copper output still down after floods -CESCO
* LME tin breaks below $16,000 T for first time since June 2010 (Updates with closing prices)
LONDON, April 14 - Copper hit a near four-week low on Tuesday as concern grew over demand in top consumer China a day before the country gives an update on its economic growth. China, which consumes some 45 percent of the world's copper, will report gross domestic product for the first quarter on Wednesday and traders say there are risks the figure may come in weaker than expected after poor trade news this week.
The Asian giant's export sales shrank 15 percent in March, deepening concern about sputtering growth.
"This gradual managed slowdown (in China) will continue and that's not good for copper," "Second-quarter demand is expected to improve, but that will just stop (copper) prices weakening significantly. We still expect a surplus of about 300,000 tonnes (this year)."
Three-month copper on the London Metal Exchange dropped to a low of $5,900 a tonne, its weakest since March 20, before paring losses to close at $5,950, down 0.7 percent.
Copper has consolidated since hitting 5-1/2 year lows in January.
Supply disruptions limited copper's losses, however. Copper output in the Atacama region of Chile that was hardest hit by floods last month is still almost completely at a standstill.
In other metals, tin slid to $15,865 a tonne, its weakest since June 2010, but rebounded to be bid at $16,275, up 1.1 percent, after failing to trade in closing open outcry rings. Prices have struggled as slowing global growth has hurt electronics demand and supply from Myanmar has risen. LME nickel slid to a near six-year low of $12,205 a tonne before bouncing back to end at $12,550, up 1.2 percent.
The metal has been under pressure from rising LME stocks, destocking by stainless steel mills and weak Chinese demand, though some analysts are starting to call the bottom.
"You've got some signs that demand is starting to pick up, but there's a lot of nickel sloshing around," said analyst Leon Westgate at ICBC Standard Bank in London.
"You're going to have to start eating into LME stocks to give a visual indicator to the market that things are tightening up before you start to see people piling in on a speculative basis."
Benchmark zinc shed 0.6 percent to close at $2,194 a tonne and lead fell 0.6 percent to $1,979. The two metals have rallied in recent weeks but failed to break their 200-day moving averages, a technical indicator that sent a sell signal to chart-based traders.


✍ ENERGY
NYMEX crude weaker in Asia as investors mull supply, production curbs:
Crude oil prices dropped in early Asia on Friday with investors noting massive oversupply threats as well as efforts to curb production, making for a mixed outlook. On the New York Mercantile Exchange, WTI crude for May delivery fell 0.45% to $56.46 a barrel. Overnight, crude oil futures rose modestly on Thursday extending recent gains, following Opec forecasts of a slowdown in U.S. production in the coming months.
On the Intercontinental Exchange, Brent crude for June delivery edged up 0.54 or 0.85% to 63.86 a barrel on Thursday. Energy traders are intently focused on supply, as crude storage in the U.S. for the week ending April 10 reached 483.1 million barrels, the highest level in at least 80 years.

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Last Updated April 22, 2015