INTERNATIONAL NEWS

The US Dollar Index (DX) strengthened by 0.4 percent yesterday hit fresh nine-year highs against the other major currencies as growing expectations for an upcoming U.S. rate hike continued to boost the greenback. Further, companies added more workers than forecast in December, indicating the U.S. job market was sustaining strength in 2014 acted as a positive factor. The currency touched an intra- day high of 92.51 and closed at 92.12 on Wednesday. ADP Non-Farm Employment Change jumped by 241k in December as compared to a gain of 227k in November. Trade Balance declined by $39 billion in November as against a fall of $42.2 billion in October.

1. Euro zone economic survey showed that consumers' inflation expectations 12 months ahead continued to fall, reaching 2.7 against 5.7 in November, well below the average since 1990 of 20.2.
2. Initial claims for state unemployment benefits slipped by 4,000 to a seasonally adjusted 294,000 for the week ended Jan. 3, the US Labor Department said on Thursday.
3. The U.S. Energy Information Administration said utilities pulled 131 billion cubic feet of gas from storage last week.

The Indian Rupee bounced back after two days of fall and appreciated by 0.5 percent on fresh dollar selling by exporters and some banks. Further, sluggish Indian stock markets, fresh capital outflows amid firm dollar overseas could not restrict sharp upside. However, hopes of interest rate hike by the Fed in its meeting exerted pressure on the currency. The currency touched an intra day high of 63.16 and closed at 63.27 on Wednesday.

PRECIOUS METAL
Silver was down 1 percent at $16.35 an ounce. The number of Americans filing new claims for unemployment benefits fell last week and job cuts declined sharply in December, suggesting the labor market is tightening. Thursday's reports support views of faster growth this year, driven by consumer spending, despite a faltering global economy.
Gold fell for the second straight day on Thursday, in a choppy session weighed down by a stronger dollar and rising stock markets after being buoyed by expectations the Federal Reserve will be patient in raising interest rates. Minutes from the Federal Reserve's latest policy meeting released on Wednesday reassured markets that the central bank was in no hurry to raise interest rates, lifting European shares. Gold has benefited from years of increased central bank liquidity and a low interest rates environment, while higher U.S. interest rates would encourage investors to put money into riskier assets such as stocks and bonds. Meanwhile, increasing speculation that Greece might exit the euro zone if a left-wing party that wants to cancel austerity measures wins the Jan. 25 elections could lift gold's demand from investors looking for protection. Among currencies, the dollar hit a 9-year high against the euro, as investors ramped up bets the European Central Bank was getting closer to loosening monetary policy to ward off deflation. Analysts are awaiting the release of U.S. non-farm payrolls data for December on Friday, a key barometer of the health of the U.S. economy. An upbeat report is likely to support the view that the Fed will raise rates sooner rather than later.

BASE METAL
Aluminum rebounded from lows on Thursday as some investors bought back short positions to lock in profits, but more losses were expected for copper and zinc ahead of the new year holiday in top metals consumer China.
Copper, burdened by worries about oversupply, failed to sustain a bounce from 4-1/2 year lows the previous day, ending in the red again.
At its lows on Wednesday, aluminum had shed 15 percent since late November as investors worried about smelters restarting capacity they had shut down.
Also weighing on copper was more evidence of higher supplies as LME inventories rose to 179,225 tonnes, bringing the increase since last August to 27 percent Copper prices traded at a four and half year low on Wednesday, weighed by demand concerns and steep falls in oil that sapped investors' appetite for most commodities.
Worries about the possibility that Greece will quit the euro zone have also dented appetite for risk. Also China, which accounts for more than 40 percent of global metal demand, is facing slower economic growth and a cooling property market, which is a major copper-consuming industry.
China's annual economic growth likely slowed to 7.2 percent in the fourth quarter, the weakest since the depths of the global crisis, which would keep pressure on policymakers to head off a sharper slowdown

ENERGY
U.S. natural gas futures gained 2 percent on Thursday after the government reported a bigger-than-expected storage draw and on colder-than-normal forecasts for the next two weeks. The U.S. Energy Information Administration said utilities pulled 131 billion cubic feet of gas from storage last week.As on Wednesday, the latest weather models for the lower 48 U.S. states on Thursday called for colder-than-normal temperatures over the next two weeks, with an expected 502 heating degree days.

Global oil prices were little changed for a second straight day on Thursday after better-than-expected U.S. jobs data helped the market hold ground after a 10 percent loss earlier in the week.
But support for oil was likely to be short-lived as market bears continue hunting for a bottom to the second-biggest price rout in crude's history, traders said.
Some traders think oil prices could be at a crossroads after losing over half their value from June highs, and that could explain benchmark Brent's stalling at above $50 since Wednesday. Others believe the market has just been handed a reprieve before being hammered lower.
Data on Thursday showed jobless claims in the United States fell last week, while a separate report said U.S. employers announced a total of 483,171 job cuts in 2014. That was 5 percent fewer than in 2013 and the smallest number since 1997. Expectations the European Central Bank could resort to stimulus measures after a rash of weak economic data and record crude imports by China in December, possibly due to attractive pricing, also helped sentiment, traders said. But the world's largest oil traders have also started hiring supertankers to store crude at sea, marking a milestone in the build-up of the global glut of supplies, freight brokers and shipping sources said.

LME INVENTORIES
LME Inventories
Copper
Lead
Zinc
Aluminium
Nickel
Current Stock
179225
221975
676375
4175750
415842
Change
550
0
-4475
-8650
30
% Change
0.31%
0.00%
-0.66%
-0.21%
0.01%


✍ NCDEX - WEEKLY NEWS LETTERS
RM SEED
RMSeed rates stabilized at these levels even as traders anticipate good demand for Mustard Oil to prevent any strong fall in this commodity rates. The recent rains in growing states of Rajasthan, Gujarat and UP had kept pressure on the market sentiments but as demand rises, overall sentiments look set to move up.
Reports of crop damage from parts of Rajasthan from recent rains also kept prices firm. Demand rose further for Mustard Oil amid falling stocks ahead of the Festival season. Cool weather in growing states keep production prospects good though reports of damage to crop in some areas in Rajasthan from the recent rains supported the market sentiments.
Haryana area coverage in Rabi 2014-15 till 24 December was reportedly 5.25 lakh ha while it was 5.47 lakh ha in 2013-14 during this time. The reason is again the high temperature during Oct. MP area coverage in Rabi 2014-15 till 24 December was 6.46 lakh ha while it was 7.87 in 2013-14. Due to good rains in Oct and fields being unused, early sowing was possible there. UP area coverage in Rabi 2014-15 till 24 December was 11.42 lakh ha while it was 10.37 lakh ha in 2013-14 during this period. As fields this year were unused in kharif season, so farmers had sown Mustard early in UP.
Mustard area coverage in All over India is 63.79 lakh Ha during Rabi 2014-15 and 67.00 lakh ha in 2013-14, area coverage during Rabi 2014-15 is lower.
As per latest reports from Oil World, the output of mustard in Europe is expected to decline near 15% to 205 lakh tons, the lowest level in past 30 years, while it was 240 lakh tons last year. There is outbreak of insects on the mustard cops in Europe, as per the Oil World re-port, which may reduce the yield
JEERA


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