MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
✍ Major News
The step down in job gains could temper expectations of a strong rebound in economic activity in the second quarter after growth nearly stalled in the first three months of the year.U.S. oil drillers cut rigs for a seventh week in a row to the lowest level since October 2009, oil services company Baker Hughes Inc said Friday, although as analysts see an end to the nearly two-year slump in drilling for new wells. Drillers cut four oil rigs in the week to May 6, bringing the total rig count down to 328, that compares with the 668 rigs operating a year ago, Baker Hughes said in its closely followed report.The Federal Reserve might still raise U.S. interest rates twice this year, New York Federal Reserve President William Dudley said on Friday. Two rate hikes remain a "reasonable expectation" despite hiring data for April that was lower than investors expected, Dudley said in an interview with the New York Times.US Nonfarm payrolls increased by 160,000 jobs last month as construction employment barely rose and the retail sector shed jobs for the first time since December 2014, the Labor Department said on Friday. The unemployment rate held at 5.0 percent last month that was because people dropped out of the labor force.

✍ Bullion
The U.S. economy added the fewest number of jobs in seven months in April and Americans dropped out of the labor force, signs of weakness that left some economists anticipating only one interest rate hike from the Federal Reserve this year. Nonfarm payrolls increased by 160,000 jobs last month as construction employment barely rose and the retail sector shed jobs for the first time since December 2014, the Labor Department said on Friday. Though the unemployment rate held at 5.0 percent last month that was because people dropped out of the labor force. The step down in job gains could temper expectations of a strong rebound in economic activity in the second quarter after growth nearly stalled in the first three months of the year. The Labor Department report showed the U.S. economy added 160,000 jobs in April, the fewest in seven months, and Americans dropped out of the labor force in droves, signs of weakness that cast doubts on whether the Fed will lift rates before the end of the year. Spot prices are up 21 percent this year on expectations the Fed will delay further rate hikes. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding bullion. U.S. short-term interest rate futures contracts rose after the payrolls data, suggesting traders see a better chance the Fed will wait longer to act. Investor sentiment toward gold showed signs of optimism. Assets of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to the highest in over two years on Thursday at 829.44 tonnes.Gold jumped 1 percent on Friday after U.S. non-farm payrolls data for April came in weaker than expected, boosting expectations the Federal Reserve will delay further interest rate increases.

✍ Energy
Oil prices edged up on Friday, supported by an early dip in the dollar and a wildfire that has shrunk Canadian oil sands crude output by a third, but Brent still ended with its sharpest weekly drop in four months as investors cashed out of April's big rally. Crude oil prices rose by 0.31 per cent on Thursday as regional investors took a drop in US production as bullish. Investors digested the sharpest one-week production decline in US production in nearly a year and a stronger than expected build in domestic crude stockpiles last week. At the MCX, crude oil futures for May 2016 contract were trading at Rs. 2,978 per barrel, up by 2.65 per cent, after opening at Rs. 2,925 against the previous closing price of Rs. 2,901. It touched the intra-day high of Rs. 2,985 till the trading. (At 12.45 PM today). However, gains were limited after the US Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that US commercial crude inventories increased by 2.8 million barrels for the week ending on April 29 in comparison with the previous week indicating that the demand for the commodity in US, world’s largest consumer of crude oil is weak.

✍ Base Metal
Tracking a weak trend in base metals overseas and subdued domestic demand, copper prices fell by 0.79% to Rs 333.30 per kg in futures trade today, as traders trimmed positions. Analysts attributed the fall in copper futures to a weak trend in base metals following disappointing China's latest PMI data. China's April official manufacturing purchasing managers index fell to 50.1 from 50.2 in March, signalling a modest weakening of momentum for the world's second-largest economy despite easy-credit policies and a stronger real-estate market. At the Multi Commodity Exchange, copper for delivery in June fell by Rs 2.65, or 0.79%, to Rs 333.30 per kg, in a business turnover of 1,290 lots. The metal for delivery in far-month August also fell by a similar margin to trade at Rs 337.65 per kg in a turnover of nine lots.Nickel gained more than 11 percent last month on speculation over the potential for improved demand from stainless steel mills in China. .Nickel futures were trading higher during noon trade in the domestic market on Friday as investors and speculators booked fresh positions in the industrial metal amid a pickup in physical demand for Nickel from alloy-makers in the domestic spot market. However, the gains in the metal were restricted by diminishing hopes over a pickup in demand from China, the world’s biggest metals consumer, as the country’s private sector activity expanded at a slower pace in April, with the Composite PMI falling to 50.8 in April from 51.3 in March, but remaining above the neutral 50-mark. Nickel futures for May 2016 contract, at MCX, were trading at Rs 603.20 per kg, up by 0.92 per cent after opening at Rs. 599, against the previous closing price of Rs. 597.7. It touched the intra-day high of Rs. 604.50. 



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