Monday, June 17, 2013

Weekly Economic Data;Data for the week 15-Jun-13 to 21-Jun-13

Expected impact on price:This indicator shows the effect of the anticipation of data on the prices of related country’s major indices. We have categorized it as below:
Very GoodGoodNeutralBadVery Bad
Actual:Refers to the actual/latest figures after its release.
Data for the week 15-Jun-13 to 21-Jun-13
DateTime (IST)CountryDataExp.PriorExp. chg todayAvg. chg of last 1 yearExp. Impact on Price
14-17 Jun-201300:00IndiaImports (YoY)%11.0%5.21
14-17 Jun-201300:00IndiaExports (YoY)%1.70%4.14
17-Jun-201311-00 AMIndiaIndia Repo Cutoff Yld7.25%7.25%0.00%0.07Neutral
17-Jun-201311-00 AMIndiaCash Reserve Ratio4.0%4.0%0.00%0.83Neutral
17-Jun-201311-00 AMIndiaReverse Repo Rate6.25%6.25%0.00%0.68Neutral
17-Jun-201306-00 PMUnited StatesEmpire Manufacturing0-1.431.434.86Neutral
18-20 Jun 201300:00United StatesFederal Reserve FOMC Meeting
18-Jun-201302-00 PMUnited KingdomConsumer Price Index (MoM)0.1%0.2%-0.10%0.45Neutral
18-Jun-201302-00 PMUnited KingdomConsumer Price Index (YoY)2.6%2.4%0.20%0.28Neutral
18-Jun-201302-30 PMGermanyZEW Survey - Economic Sentiment38.136.41.7012.25Neutral
18-Jun-201302-30 PMGermanyZEW Survey - Current Situation9.58.90.605.46Neutral
18-Jun-201306-00 PMUnited StatesHousing Starts (MoM)0.950M0.853M0.10M0.03Good
18-Jun-201306-00 PMUnited StatesConsumer Price Index (MoM)0.2%-0.4%0.60%0.26Good
19-Jun-201302-00 PMUnited KingdomBank of England Minutes
19-Jun-201304-30 PMUnited StatesMBA Mortgage Applications5.00%
19-Jun-201308-00 PMUnited StatesEIA Crude Oil Stocks change2.523M3.45
19-Jun-201311-30 PMUnited StatesFed Interest Rate Decision0.25%0.25%0.00%0.00Neutral
20-Jun-201312-00 AMUnited StatesFed's Monetary Policy Statement and press conference
20-Jun-201307-15 AMChinaHSBC Manufacturing PMI49.20.200.97Neutral
20-Jun-201312-18 PMFranceMarkit Manufacturing PMI47.046.40.601.53Neutral
20-Jun-201312-28 PMFranceMarkit Services PMI44.844.30.501.45Neutral
20-Jun-201312-58 PMGermanyMarkit Manufacturing PMI49.949.40.501.32Neutral
20-Jun-201306-00 PMUnited StatesInitial Jobless Claims340k334K6.00K8.00Neutral
20-Jun-201318-30 PMEuropean Monetary UnionEuro Area Finance Ministers Meet In Luxembourg
20-Jun-201307-30 PMUnited StatesCB Leading Indicator (MoM)0.2%0.6%-0.40%0.56Neutral
20-Jun-201307-30 PMEuropean Monetary UnionConsumer Confidence-21.5-21.90.401.04Neutral
20-Jun-201307-30 PMUnited StatesExisting Home Sales (MoM)5.01M4.97M0.040.16Neutral
20-Jun-201308-00 PMUnited StatesEIA Natural Gas Storage change95B24.64
21-Jun-201312-00 PMEuropean Monetary UnionEu-27 Finance Ministers Meet in Luxembourg

Empire State Manufacturing Index And Foreign Securities Purchases - Economic Data

Friday, June 14, 2013

Technical Analysis – Copper could move to $ 7270



  • Copper is in a large symmetrical triangle formation at $7,483-6,856. Since this triangle is also a continuation pattern, it suggests a drop unless the metal can break above the top of the triangle formation. A break below this triangle offers a downside target of $6,000-5,900 while a break back above it offers a weaker (counter-trend) target of $7,883-7,938.


  • Presently, it can test support of the bottom of the triangle formation at $6,856 but this might not come about immediately.
  • Overall we are neutral-negative in the short term. This would only change on a break back above the UTL at $7,296.
  • We are neutral in the medium term and will remain so until a break of this formation. We are neutral-negative in the long term.

Tuesday, June 11, 2013

Commodity futures turnover in India rose 4.7 percent to 28.16 trillion rupees in April and May

India has 21 commodity bourses, including six operating at the national level. 
Foreigners are still not allowed to trade in futures, but can buy stakes in commodity exchanges in the world's second-biggest producer of wheat and biggest buyer of gold.
Agricultural futures fell 26.46 percent to 2.5 trillion rupees in the first two months of the financial year starting from April. Cumulative turnover for bullion rose 4.23 percent to 13.52 trillion rupees, the market regulator said in a statement.
"As far as commodity futures turnover is concerned, tough times are ahead," said Harish Galipelli, head of commodities and currency, JRG Wealth Management.
Volumes will take a hit due to the commodities transaction tax as the cost of transaction will increase, making it difficult for jobbers, traders to enter and exit, he said.
CTT will be levied at 0.01 percent of the value of transaction on all non-agricultural commodities, but the date of implementation has not been fixed.

Commodity exchanges in India, which allowed futures trading in 2003, trade in about 80 commodities ranging from gold to carbon credits, but most of the volumes are cornered by 8-10 commodities.

Monday, June 10, 2013

Weekly Economic Data; Economic & Political Events, Data for the week 08-Jun-13 to 14-Jun-13

Expected impact on price: This indicator shows the effect of the anticipation of data on the prices of related country’s major indices. We have categorized it as below:
Very Good Good Neutral Bad Very Bad
Actual: Refers to the actual/latest figures after its release.

Date Time (IST) Country Data Exp. Prior Exp. chg today Avg. chg of last 1 year Exp. Impact on Price
10-Jun-2013 12-15 PM France Industrial Output (MoM) 0.3% -0.9% 1.20% 2.02 Neutral
11-Jun-2013 02-00 PM United Kingdom Industrial Production (MoM) 0.0% 0.7% -0.70% 1.75 Neutral
11-Jun-2013 03-00 PM Germany Merkel speaKs at BDI Germany Industry Day          
11-Jun-2013 07-30 PM United States Wholesale Inventories 0.2% 0.4% -0.20% 0.47 Neutral
12-Jun-2013 11-00 AM India Cumulative Industrial Output 2.3% 2.50% -0.20% 0.66 Neutral
12-Jun-2013 02-00 PM United Kingdom Claimant Count Change -5.0K -7.3K 2.30K 9.54 Neutral
12-Jun-2013 04-30 PM United States MBA Mortgage Applications   -11.5%   7.79  
12-Jun-2013 08-00 PM United States EIA Crude Oil Stocks change   -6.267K   3.45  
12-Jun-2013 11-30 PM United States Monthly Budget Statement -$110.0B     131.52  
13-Jun-2013 04-30 PM United States World Bank Releases Global Economic Prospects          
13-Jun-2013 06-00 PM United States Initial Jobless Claims 345K 346K -1.00K 14.63 Neutral
13-Jun-2013 06-00 PM United States Retail Sales (MoM) 0.4% 0.1% 0.30% 0.63 Neutral
13-Jun-2013 08-00 PM United States EIA Natural Gas Storage change   111B   37.42  
14-Jun-2013 12-00 PM India WPI Inflation 4.86% 4.89% -0.03% 0.38 Neutral
14-Jun-2013 02-30 PM European Monetary Union Consumer Price Index (YoY) 1.4%     0.07  
14-Jun-2013 06-00 PM United States Producer Price Index (MoM) 0.10% -0.7% 0.80% 0.65 Good
14-Jun-2013 06-45 PM United States Industrial Production (MoM) 0.2% -0.5% 0.70% 0.97 Neutral
14-Jun-2013 07-25 PM United States Reuters/Michigan Consumer Sentiment Index 84.5 84.5 0.00 3.26 Neutral
14-Jun-2013 08-00 PM Germany Merkel Holds Talks With German State Prime Ministers          

Saturday, June 8, 2013

Copper Top Companies And Chile's Biggest Mining Projects. Codelco, Freeport-McMoRan, BHP Billiton, Grupo Mexico, Xstrata

Copper Top Consuming, Producing Region And Usage World-wide by Industrial Sectors

 Copper Top Consumers

 Copper Top Producers
Usage by Industrial Sectors

Copper Production Consumption Stockpiles Inventories in 2013

In the long-term, many predict copper stockpiles to rise, prices to continue to fall, and global production to increase - leading to a severe oversupply situation. However, some recent forecasts for the other side of the equation - consumption - don't necessarily paint such a bleak picture.
Refined copper consumption in 2013 will most likely continue to be relatively flat in North America and slightly negative in Western Europe; however, India and China are both forecast to continue their high levels of consumption through the year and well into 2014/15. In fact, total Asian consumption is forecast to increase by approximately 4.5%-5% in 2013.
The below chart, presented by BofA Merrill Lynch at last month's World Copper Conference, does a great job of presenting their forecast relative to historical.
Yes, production will continue to increase - slightly outpacing consumption. However, their consumption forecast shows decent growth. Despite the supply/demand imbalance, global inventories will be returning to a level that is well within historic averages.

Friday, June 7, 2013

Technical Analysis – Zinc – Runs into overhead supply may correct lower.


  • Zinc stepped up a gear a week ago – prices have cut up through various resistance levels to set a high so far at $1,970. This took out the former resistance at $1,961.75 from March 25.
  • Prices are now consolidating below yesterday’s highs and the stochastics have crossed lower intraday, which suggests there may be more consolidation in the near term. The MACD remains strong so we see this as just a pause rather than the end of the rally.
  • Our next upside target is $2,012 if it crosses $1970


Zinc is looking good but it is back at the top of the range so we may well see selling cap the advance for a while.
ZINC could correct lower to $ 1890-95 range before deciding it's next move.

Finance Minister P.Chidambaram asked banks to discourage customers from buying Gold

Less than 24 hours after the Government raised the import duty on gold, Finance Minister P. Chidambaram asked banks to discourage customers from buying the yellow metal.


“I think the RBI has advised banks that they should not sell gold coins. The RBI has put in place regulations that gold can only be imported on a consignment basis with increase in margins to 100 per cent. I would urge all the banks to please advise their branches that they should not encourage their customers to invest or buy gold,” said Chidambaram at the 66th Annual General Meeting of the Indian Banks’ Association. India imported 142 tonnes of gold in April and 162 tonnes in May. Last year’s monthly average was 70 tonnes. In the first two months of this fiscal, the monthly average of gold import is 152 tonnes.
Referring to this sharp jump, the Minister, in a lighter vein said, “I hope a day will come when we regard gold as any other metal. It just shines a little more than copper or brass.”
Chidambaram said the current account deficit remains a matter of concern. Gold imports have been the key contributor to the CAD, which touched a record 6.7 per cent of GDP in the October-December quarter.


CAD, a key indicator of a country’s external vulnerability, arises when a country's total import of goods, services and transfers is greater than exports. A widening CAD exerts downward pressure on the rupee, making imports costlier. This is a cause for concern for the government as costly crude oil imports have an inflationary impact.
“When there was a sharp drop in gold prices, millions were happy. I’m afraid I was not among the millions. I told the (RBI) Governor that the drop in gold prices internationally is bad news for India. My fears proved true.”
In the medium term, the Minister said he expects that the dip in inflation will make fixed income products more attractive as vehicles of savings and divert some of the disproportionate attention on gold to fixed income instruments.
At a summit later in the day, the Finance Minister said: “All I can do is appeal to the people of India that the country cannot import so much gold. Whatever gold is there in the country can be traded freely… there are no restrictions on that.”

Thursday, June 6, 2013

Government Hikes Gold Import Duty To 8% from 6%

The government has hiked the gold import duty to 8% from current 6% in order to curb extremely high demand for the metal. 
This is the second hike in gold import duty since January. 
Gold import duty has been hiked to 8% from 2% in past two years.
The government is making increasing efforts to reduce the quantum of gold imports which are responsible for the country's growing Current Account Deficit. 
In April, 2013, gold and silver imports surged by 138% to $7.5 billion, as against $3.1 billion a year ago.

CTT Could Be Delayed To October 2013 - Commodity Transaction Tax

Punters may be able to breathe easy for a while longer as the new transaction tax on non-farm futures could be delayed with the administering body, Central Board of Direct Taxes, or CBDT, working out procedural details relating to how the levy would be collected, according to government sources. 

The imposition of CTT was announced by finance minister P Chidambaram during his presentation of the FY14 Budget in February. Along with CTT, Chidambaram reduced the Securities Transaction Tax (STT) in the equity derivatives segment, which was notified last month and became effective from June 1. However, there has been no notification on CTT even three months after its announcement. "It is likely that CTT could come into effect from the month of October" said one of the sources. 

The delay led to some commodity market officials doubting whether the tax could be made retrospective. However, an official from one of the leading commodity exchanges said they were told by income tax officials that since the nature of the tax requires it to be collected from a third party, it would not be imposed retrospectively. Exchanges are required to deduct both CTT and STT from brokers or trading members and deposit it with the income tax department. 

In the equity segment, STT was cut to Rs 10 per lakh from Rs 17 per lakh in FY14 Budget. CTT will be charged at the same rate on non-agri commodity futures. Effectively, traders will have to pay 0.01% tax, that is, Rs 10 for a transaction value of Rs 1 lakh. The current transaction cost (without any tax) is less than a third of this in commodity futures. Commodity exchanges had strongly resisted CTT imposition, but finance ministry was of the view that most non-agri trades were speculative in nature, so a tax was justified. 

Both NSE and BSE together pay STT between Rs 5,000 crore to Rs 7,000 crore and government could end up earning similar revenue from CTT once it is imposed.

Source : Economic Times

Wednesday, June 5, 2013

Copper Rises on Freeport-McMoRan Copper & Gold Inc.’s Grasberg Mine Shutdown

Copper futures rose to the highest in almost two weeks on prospects for reduced supply as the world’s second-biggest mine remained closed following deadly accidents.
Freeport-McMoRan Copper & Gold Inc.’s Grasberg mine in Indonesia will be shut for as long as three months while the government holds an investigation. Closing the mine for the entire period would remove about 140,000 metric tons of copper supply, according to Macquarie Group Ltd., about 20 percent of the investment bank’s disruption allowance for 2013.
“The potential for an extended shutdown at the giant Grasberg mine has helped lend support to copper prices,” Leon Westgate, an analyst at Standard Bank Plc in London, said in a report e-mailed today. “The most immediate impact will be felt on the concentrate market.”
A tunnel collapse at Grasberg on May 14 killed 28 people, and another worker died June 1 in a separate incident. A landslide in April reduced production at Rio Tinto Group’s Bingham Canyon mine in the U.S., and output at Chile’s Collahuasi also is limited. Vedanta Resources Plc, controlled by billionaire Anil Agarwal, said on May 24 that its Konkola Copper Mines unit in Zambia plans to cut 24 percent of the workforce.
As a result, copper supply is set to be curbed in what is normally a seasonally strong period for demand, according to Goldman Sachs Group Inc. The metal will trade at $8,000 a ton in six months, the bank predicted.
BHP Billiton Ltd.’s Escondida site in Chile is the world’s largest copper mine.
On the London Metal Exchange, copper for delivery in three months climbed 1.6 percent to $7,455 a ton ($3.38 a pound), the biggest gain since May 8. Aluminum, nickel, zinc and lead gained, while tin dropped.

Weekly Economic Data; Economic & Political Events, Data for the week 01-Jun-13 to 07-Jun-13

Data for the week 01-Jun-13 to 07-Jun-13
Date Time (IST) Country Data Exp. Prior Exp. chg today Avg. chg of last 1 year Exp. Impact on Price
03-Jun-2013 06-30 AM European Monetary Union ECB's Draghi Speaks at Conference in Shanghai          
03-Jun-2013 07-15 AM China HSBC Manufacturing PMI 49.6 50.4 -0.80 0.89 Neutral
03-Jun-2013 01-18 PM France Markit Manufacturing PMI 45.5 44.4 1.10 1.53 Neutral
03-Jun-2013 01-23 PM Germany Markit Manufacturing PMI 49.0 48.1 0.90 1.37 Neutral
03-Jun-2013 07-30 PM United States ISM Manufacturing PMI 50.5 50.7 -0.20 1.35 Neutral
04-Jun-2013 06-00 PM United States Trade Balance $-41.0B $-38.8B -2.20$ 3.21 Neutral
05-Jun-2013 01-18 PM France Markit Services PMI 44.3 44.3 0.00 1.90 Neutral
05-Jun-2013 02-30 PM European Monetary Union Gross Domestic Product s.a. (QoQ) -0.2% -0.6% 0.40% 0.18 Very Good
05-Jun-2013 02-30 PM European Monetary Union Gross Domestic Product s.a. (YoY) -1.0% -0.9% -0.10% 0.53 Neutral
05-Jun-2013 04-30 PM United States MBA Mortgage Applications   -8.8%   7.79  
05-Jun-2013 05-45 PM United States ADP Employment Change 170K 119K 51.00 46.50 Neutral
05-Jun-2013 07-30 PM United States Factory Orders (MoM) 1.4% -4.0% 5.40% 3.36 Neutral
05-Jun-2013 08-00 PM United States EIA Crude Oil Stocks change   3M   3.45  
06-Jun-2013 03-30 PM Germany Factory Orders s.a. (MoM) -1.0% 2.2% -3.20% 3.85 Neutral
06-Jun-2013 04-30 PM United Kingdom BoE Interest Rate Decision 0.5% 0.5% 0.00% 0.00 Neutral
06-Jun-2013 05-15 PM European Monetary Union ECB Interest Rate Decision 0.5% 0.5% 0.00% 0.06 Neutral
06-Jun-2013 06-00 PM European Monetary Union ECB Monetary policy statement and press conference          
06-Jun-2013 06-00 PM United States Initial Jobless Claims 345K 354K -9.00 14.63 Neutral
06-Jun-2013 08-00 PM United States EIA Natural Gas Storage change   88B   37.88  
07-Jun-2013 03-30 PM Germany Industrial Production s.a. (MoM) -0.2% 1.2% -1.40% 2.36 Neutral
07-Jun-2013 06-00 PM United States Nonfarm Payrolls 168K 165K 3.00 43.00 Neutral
07-Jun-2013 06-00 PM United States Unemployment Rate 7.5% 7.5% 0.00% 0.13 Neutral