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Daily Commodity Roundup as on Friday, September 07, 2018
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 1
14.10CRUDE $
67.77
0.04 -0.21 -1.38
IN
TER
NA
TIO
NA
L M
AR
KET U
PD
ATE GOLD $
1200.34SILVER $
USDJPY110.595
0.01 -0.01 -0.07EURUSD
1.1624GBPUSD
1.29257
LME
NICKEL
12355
-0.92 -0.27 -0.92
LME
COPPER
5854 LME
ZINC
2432
$ INDEX95.01
0.27 0.10 -0.01
LME ALUMINIUM
2052 LME
LEAD
2045
DJIA25975
0.59 0.52 0.09SENSEX
38243NIFTY
11537
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 2
NIKKEI22175
0.31 -0.28 -1.39USDINR
72.13 S&P
INDEX
2889
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MCX Gold Oct 2018
Gold prices rose propelled by a weaker dollar, short-covering and physical buying in Asia.
Gold on MCX settled up 0.77% at 30547 as the dollar fell against the yen
on fears that U.S. President Donald Trump would take up trade issues
with Japan as the markets braced for another round of U.S. tarriffs on
China. The dollar extended losses against the yen after reports that U.S.
President Donald Trump told a Wall Street Journal columnist he might
take on trade issues with Japan. Another big worry for investors was the
end of a public consultation period over trade, after which U.S. President
Donald Trump could impose tariffs on an additional $200 billion of Chinese
goods. China’s commerce ministry warned that the country would
retaliate against any new tariff measures.. Trump had said on Wednesday
that the United States was not yet ready to come to an agreement with
China. Investors also awaited news from U.S.-Canada talks about
revamping the North American Free Trade Agreement (NAFTA). A few
stubborn issues stood in the way of a deal, including dairy, protection for
media companies, and how to solve future trade disputes. The ADP
National Employment Report showed private payrolls increased by
163,000 jobs last month. Gold-backed exchange-traded funds (ETFs)
experienced outflows in North America during August, but recorded
inflows in Europe and Asia as a strong U.S. dollar helped weaken U.S.
gold prices, and investors hedged global trade risks and currency
weakness, the World Gold Council said. Markets will be closely watching a
U.S. employment report due on Friday for clues on the pace of interest
rate increases by the Federal Reserve. Technically now Gold is getting
support at 30398 and below same could see a test of 30249 level, And
resistance is now likely to be seen at 30698, a move above could see
prices testing 30849.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
30400
SUPPORT 3
30998 30849 30698 30398 30249 30098
30700 30400 30547 0.77 8663
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 3
Trading Ideas :Gold trading range for the day is 30249-30849.
Germany would be ready to accept a less detailed agreement on the UK’s future economic and trade ties with the EU in a bid to get a Brexit deal done.
Physical demand has been a bit higher in India as this is a peak season for buying gold due to weddings and festivals
Markets already expect the Fed to hike interest rates by a quarter point at the next policy meeting on Sept. 25-26.
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MCX Silver Dec 2018
Silver prices rose as the safe-haven metal finally sparked buyer interest amid U.S.-China trade worries.
Silver on MCX settled up 0.31% at 37151 as the safe-haven metal finally
sparked buyer interest amid U.S.-China trade worries, while a weaker-
than-expected reading on job creation also helped reduce worries over a
faster pace of rate hikes from the Federal Reserve. The softer dollar
helped prices, though markets’ focus remained centered on the U.S. -
China trade dispute amid fears that an escalation could be imminent. U.S.
President Donald Trump could slap tariffs on an additional $200 billion
worth of imports from China when a public consultation period ends later
Thursday. China has warned that it will retaliate if the U.S. imposes fresh
tariffs on its goods. The number of Americans filing for unemployment
benefits fell to near a 49-year low last week, suggesting sustained
strength in the labour market that should continue to underpin economic
growth. Initial claims for state unemployment benefits dropped 10,000 to
a seasonally adjusted 203,000 for the week ended Sep 1, the lowest
since December 1969. The four-week moving average of initial claims,
considered a better measure of the labour market trends as it factors out
week-to-week volatility, fell 2,750 last week to 209,500, also the lowest
since December 1969. Markets already expect the Fed to hike interest
rates by a quarter point at the next policy meeting on Sept. 25-26. Fed
fund futures currently put the probability of an additional increase in
December at just above 70%, according to Fed Rate Monitor Tool.
Technically market is under fresh buying as market has witnessed gain in
open interest by 0.77% to settled at 27721 while prices up 116 rupees,
now Silver is getting support at 37009 and below same could see a test of
36868 level, And resistance is now likely to be seen at 37368, a move
above could see prices testing 37586.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
37120 37445
37727 37586 37368 37009 36868 36650
37086 37151 0.31 27721
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2 SUPPORT 3
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 4
Trading Ideas :Silver trading range for the day is 36868-37586.
A weaker-than-expected reading on job creation also helped reduce worries over a faster pace of rate hikes from the Federal Reserve.
The softer dollar helped prices, though markets’ focus remained centered on the U.S. - China trade dispute amid fears that an escalation could be imminent.
Holdings at ishares silver trust gained by 0.91% i.e. 93.57 tonnes to 10348.67 tonnes from 10255.10 tonnes.
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MCX Crudeoil Sep 2018
Crude oil prices settled lower as a draw in U.S. crude supplies was offset by sharp builds in product inventories.
Crudeoil on MCX settled down -1.01% at 4884 as a draw in U.S. crude
supplies was offset by sharp builds in product inventories. U.S.
commercial crude oil inventories fell by 4.3 million barrels to 401.49
million barrels in the week to Aug. 31, the lowest since February 2015,
U.S. Energy Information Administration (EIA) data showed. Despite that,
analysts said prices were curbed by a rise in refined product stocks and a
relatively weak U.S. peak fuel consumption season this summer. Gasoline
stocks rose by 1.8 million barrels, while distillate stockpiles , which
include diesel and heating oil, climbed by 3.1 million barrels, the EIA data
showed. U.S. crude oil production last week remained at a record 11
million barrels per day (bpd), a level it has largely been at since July. The
build in products emerged as refinery activity rose to 96.6% of their
capacity last week from 96.3% the prior week, with crude inputs
averaging about 17.65 million barrels per day during, up 0.081 million
barrels from the prior week, the EIA said. Oil prices were also pressured
by concerns that U.S.-China trade war could intensify as traders await
confirmation on whether the Trump administration will move ahead with a
25% tariff on $200 billion more of Chinese imported goods. China, the
world's largest oil importer, has seen its economic growth wane in the
wake of a trade dispute with the U.S., and some fear that another round
of tariffs on Beijing could exacerbate the decline, pressuring oil demand
growth. Technically now Crudeoil is getting support at 4818 and below
same could see a test of 4751 level, And resistance is now likely to be
seen at 4962, a move above could see prices testing 5039.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
4948 4972
5106 5039 4962 4818 4751 4674
4828 4884 -1.01 14081
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2 SUPPORT 3
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 5
Trading Ideas :Crudeoil trading range for the day is 4751-5039.
Inventories of U.S. crude fell by 4.302 million barrels for the week ended Aug. 31, beating expectations for a draw of 1.294 million barrels
The Organization of the Petroleum Exporting Countries said it expected global oil demand to break through 100 million bpd for the first time this year.
Meanwhile, there are concerns that U.S. sanctions against Iran, which will target the OPEC-member's oil industry from November, will tighten global supply.
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MCX Copper Nov 2018
Copper rose as a weaker dollar underpinned prices even as bearish sentiment lingered amid a trade war between the United States and top metals consumer China.
Copper on MCX settled up 1.13% at 424.40 gained in the line of
expectation on short covering tracking firmness from LME Copper prices
which were up by approximately 1% at the close of trading on Thursday
September 6, propped up by a raft of fresh buying and a softer dollar
index, while a downswing in aluminium prices came amid escalating US-
Sino trade tensions. Copper price continues to battle strong
macroeconomic headwinds, namely the persistent trade rift between the
United States and China, which is capping investment and driving prices
lower. However, concerns of China’s tough stance on trade disputes with
the US continue to weigh on investors and the market. With more than
100,000 tonnes booked for removal since August 20, total on-warrant
copper inventory remains at its lowest level since December 2017.
Appreciating by more than 1% over the morning, copper’s three-month
price recovered losses made at Wednesday’s close, climbing back toward
$6,000 per tonne while total on-warrant material remains at its lowest
level since Dec 2017 at 146,600 tonnes. Last night the US dollar index fell
below 95 this followed after St Louis Federal Reserve Bank President
James Bullard said on Wednesday that the US Fed should hold off on
further interest rate hikes because the stance of monetary policy is
already at neutral or possibly restrictive. Concerns about new US trade
tariffs on China also cast a shadow on the market. Base metals saw
mixed trades. LME zinc grew 0.87% and copper increased 0.44%. Other
base metals closed slightly lower. Technically market is getting support at
420 and below same could see a test of 415.7 level, And resistance is
now likely to be seen at 429, a move above could see prices testing
433.7.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
420.50
SUPPORT 3
438.0 433.7 429.0 420.0 415.7 411.0
429.40 420.40 424.40 1.13 19242
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Copper trading range for the day is 415.7-433.7.
U.S. President Donald Trump said that the United States was not yet ready to come to an agreement over trade disputes with China but he said talks would continue.
Traders await confirmation on whether Trump will impose levies on $200 billion more of Chinese imports, the wider metals market traded mixed.
Warehouse stock for Copper at LME was at 254350mt that is down by -7750mt.
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 6
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MCX Zinc Sep 2018
Zinc gains as a subdued greenback aided gains offsetting some concerns over the threat of a ramp up in the U.S. China trade war
Zinc on MCX settled up 1.23% at 176.50 gained on short covering
tracking firmness from LME Zinc whcih led on the upside with a 0.9%
rebound propped up by a raft of fresh buying and a softer dollar index. A
weaker dollar underpinned prices even as bearish sentiment lingered
amid a trade war between the United States and top metals consumer
China. The dollar sagged as the pound led a bounce in European
currencies, making the greenback-priced commodities cheaper for
importers holding other currencies. Sentiment was buoyed by the weaker
U.S. dollar, which has been weighing on investor appetite in recent
trading sessions. However, with the ongoing turmoil in emerging markets,
plus weakness in the Chinese equity markets, the metals sector may
struggle to hold their gains in coming days. U.S. President Donald Trump
said on Wednesday that the United States was not yet ready to come to
an agreement over trade disputes with China but he said talks would
continue. The world’s two largest economies have slapped tariffs on $50
billion of each other’s goods in a tit-for-tat trade war, and Trump is
considering imposing tariffs on another $200 billion in Chinese imports.
Base metals saw mixed trades. LME zinc grew 0.87% and copper
increased 0.44%. Other base metals closed slightly lower. While a day
ahead market participants should monitor data including the US nonfarm
payroll employment in August, China’s foreign exchange reserves, and
the eurozone's GDP for the second quarter. Technically market is under
short covering as market has witnessed drop in open interest by -12.8%
to settled at 3835 while prices up 2.15 rupees, now Zinc is getting
support at 175.2 and below same could see a test of 173.7 level, And
resistance is now likely to be seen at 178.5, a move above could see
prices testing 180.3.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
175.5
SUPPORT 3
181.8 180.3 178.5 175.2 173.7 171.9
178.9 175.5 176.5 1.23 3835
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Zinc trading range for the day is 173.7-180.3.
Resumption after maintenance raised output of refined zinc across Chinese smelters to 418,700 mt in August, up 2.52% from July, but down 6.11% from a year ago.
Total output in the first eight months of the year gained 0.66% on the year and stood at 3.52 million mt.
Warehouse stock for Zinc at LME was at 235650mt that is down by -1250mt.
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 7
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MCX Nickel Sep 2018
Nickel ended with small gains as longs entered the market cautiously on concerns over potential US tariffs on $200 billion worth of Chinese goods.
Nickel on MCX settled up 0.22% at 896.20 gained on fresh buying while
LME nickel remained under pressure with a 0.5% fall. Nickel prices on
MCX seen bounce as support seen from Rupee weakness where Indian
rupee nose-dived against the U.S. dollar on Thursday, falling below the
72 mark, amid persistent sell-off in emerging markets driven by worries
over global economic growth. The dollar index is consolidating after its
recent rebound and was recently quoted at 95.16. With the dollar paused,
the pressure on other markets has eased. The yuan is treading water
around recent levels and was recently quoted at 6.8369 and most of the
emerging market currencies we follow are consolidating after their recent
significant weakness. Last night the US dollar index fell below 95 this
followed after St Louis Federal Reserve Bank President James Bullard said
on Wednesday that the US Fed should hold off on further interest rate
hikes because the stance of monetary policy is already at neutral or
possibly restrictive. Base metals saw mixed trades. LME zinc grew 0.87%
and copper increased 0.44%. Other base metals closed slightly lower.
While a day ahead market participants should monitor data including the
US nonfarm payroll employment in August, China’s foreign exchange
reserves, and the eurozone's GDP for the second quarter. Technically
market is under fresh buying as market has witnessed gain in open
interest by 2.67% to settled at 13594 while prices up 2 rupees, now
Nickel is getting support at 889.8 and below same could see a test of
883.5 level, And resistance is now likely to be seen at 903.7, a move
above could see prices testing 911.3.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
896
SUPPORT 3
917.6 911.3 903.7 889.8 883.5 875.9
905 891.1 896.2 0.22 13594
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Nickel trading range for the day is 883.5-911.3.
The Caixin China services purchasing managers' index (PMI) slipped to 51.5 in August from 52.8 in July.
The US trade deficit rose to a five-month high in July, by 9.5% to $50.1 billion as exports dropped and imports hit a record high.
Warehouse stock for Nickel at LME was at 236706mt that is down by -324mt.
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 8
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NCDEX Jeera Oct 2018
Jeera prices ended with losses on weak demand and prospects of higher sowing.
Jeera prices dropped on weak demand and prospects of higher sowing.
Higher sowing expectations due to good monsoon in the harvesting area
for the year 2018-2019 kept jeera prices under pressure. Fall in demand
from retailers and stockists amid adequate stocks also put pressure on
jeera prices. However, hopes of fresh export demand due to weak rupee
prevented prices to fall further. As per trade information, crop damaged
reported in Syria and Turkey due to heavy rainfall in June support Indian
Jeera in International market. Quality wise (due to heavy rainfall) and
price wise Indian Jeera more affordable than other producing country.
Lower Jeera supply reported in the spot market during the period, as
stockists were holding back their stocks on expectations of higher prices
in coming days. Jeera supply from last year up by 100% due to increased
production current year. Currently, all India stocks reported around 25 –
27 lakh bags. According to export data released by Commerce ministry,
exports in May surged 96% on year to 27,790 tonnes. Moreover, country
exports about 87,115 tonnes of Jeera during Mar-May 2018. Jeera arrivals
during July are pegged at 8,700 tonnes compared to 3,800 tonnes last
year for same period. OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
19650
SUPPORT 3
19900 19785 19610 19320 19205 19030
19670 19380 19430 -0.87 5472
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Jeera trading range for the day is 6477-6477.
However, hopes of fresh export demand due to weak rupee prevented prices to fall further.
NCDEX accredited warehouses jeera stocks dropped by 36 tonnes to 2647 tonnes.
In Unjha, a key spot market in Gujrat, jeera remains unchanged at0 rupees to end at 19500 rupee per 100 kg.
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 9
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NCDEX Turmeric Oct 2018
Turmeric settled down on expectation of higher acreage this year.
Turmeric on NCDEX settled down by -1.33% at 6664 on expectation of
higher acreage this year. Farmers have planted turmeric on higher area in
all the producing states due to higher prevailing prices. Turmeric area
grew to 16,782 hectare until August 15 from 13,156 hectare a year ago,
data from Tamil Nadu state government showed. In Telangana, turmeric
acreage rose to 47,760 hectare until August 30 from 44,956 hectare a
year ago, data showed. Similarly, in Andhra Pradesh farmers planted
turmeric over an area 16,000 hectares until August 29, up from 14,000
hectares a year ago. Turmeric sowing is up this year in all the producing
centres and crop is in good conditions except in some parts Tamil Nadu.
However, higher yield in other centres will compensate the losses, if any,
in Tamil Nadu. In Telangana, Turmeric sowing reported 45,583 hectares
as compared to 38,254 hectares in the corresponding period last year.
83% sowing completed from season normal. Till now, Nizamabad region
reported 13,993 hectares compared to last year 9,859 hectares and
Warangal (rural) reported 4,453 hectares compared to last year 3,825
hectares. In Andhra Pradesh, Turmeric sowing reported 12,320 hectares
as compared to 7,998 hectares in the corresponding period last year,
68% sowing completed from season normal. The price of the both
varieties of turmeric was decreased again. For want of proper upcountry
demand and also poor quality, the traders quoting decreased price have
purchased for their requirement alone. In Nizamabad, a major spot
market in AP, the price ended at 6961.9 Rupees dropped -23.8
Rupees.Technically now Turmeric is getting support at 6612 and below
same could see a test of 6560 level, And resistance is now likely to be
seen at 6754, a move above could see prices testing 6844.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
6778
SUPPORT 3
6896 6844 6754 6612 6560 6470
6792 6650 6664 -1.33 10060
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Turmeric trading range for the day is 6560-6844.
Farmers have planted turmeric on higher area in all the producing states due to higher prevailing prices.
NCDEX accredited warehouses turmeric stocks dropped by 50 tonnes to 4567 tonnes.
In Nizamabad, a major spot market in AP, the price ended at 6961.9 Rupees dropped -23.8 Rupees.
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 10
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MCX Menthaoil Sep 2018
Mentha oil prices ended with gains tracking firmness in spot demand as farmers and stockists have kept their stocks in hopes of an increase in prices.
Mentha oil on MCX settled up by 2.71% at 1722.6 tracking firmness in
spot demand as farmers and stockists have kept their stocks in hopes of
an increase in prices. On the other hand, the export demand in the
current time is average, but there is hope for an increase in export
demand due to drop in rupee to lowest level against the dollar. Spot
markets are also witnessing strong consumption demand amid restricted
supplies. Bumper crop harvest has been discounted in the market and
market is moving upwards on rising demand from end users. Arrivals in
Sambhal stood at 400 drums compared to 350 drum a day ago while in
Barabanki supplies rose to 500 drums from 450 drums a day earlier.
According to preliminary estimates, mentha oil production in 2018-19
would be 40,000-45,000 ton against last year's production of 35,000
tons. There could be chances of crop damage to certain extend due to
unfavourable weather condition. Besides, farmers are likely to hold back
the stocks as the present prices are not remunerative for them. However,
in recent years, the growth in production and consumption of synthetic
mentha has influenced the demand for natural mentha. As per sources,
India contributes around 80% to the total global mentha oil production.
Total global production stood at around 48,000 tonnes, out of which India
produces between 30,000-40,000 tonnes. Mentha oil spot at Sambhal
closed at 1883.40 per 1kg. Spot prices was up by Rs.40.80/-.Technically
market is under short covering as market has witnessed drop in open
interest by -6.89% to settled at 1447 while prices up 45.5 rupees, now
Menthaoil is getting support at 1694 and below same could see a test of
1665.3 level, And resistance is now likely to be seen at 1739.4, a move
above could see prices testing 1756.1.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
1683.20
SUPPORT 3
1784.8 1756.1 1739.4 1694.0 1665.3 1648.6
1727.40 1682.00 1722.60 2.71 1447
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Menthaoil trading range for the day is 1665.3-1756.1.
Mentha oil spot at Sambhal closed at 1883.40 per 1kg. Spot prices was up by Rs.40.80/-.
On the other hand, the export demand in the current time is average, but there is hope for an increase in export demand due to drop in rupee to lowest level against the dollar.
Arrivals in Sambhal stood at 400 drums compared to 350 drum a day ago while in Barabanki supplies rose to 500 drums from 450 drums a day earlier.
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 11
TIME ZONE Forecast
CommodityLME STOCK Stock
COPPER -7750 254350
ALUMINIUM -1750 1062700
NICKEL -324 236706
LEAD 125 121625
ZINC -1250 235650
3991 22790 19430 4380 6664 4103 606.5 3254
DAILY MARKET TRADING LEVEL
COMMODITIESNCDEX CHANA Oct
2018
NCDEX Cotton Oct
2018
NCDEX Jeera Oct
2018
NCDEX Guarseed10
Oct 2018
NCDEX Turmeric
Oct 2018
NCDEX Rmseed Oct
2018MCX CPO Sep 2018
NCDEX Soyabean
Oct 2018
NCDEX
Ref.Soya oil
Oct 2018
749.3CLOSE
P. POINT 4011 22823 19495 4396 6702 4095
4060 22876 19610 4430 6754 4115
RESISTANCE
4178 23016 19900 4512 6896 4146
605.5 3246 749
759
4129 22963 19785 4478 6844 4126 611.4 3282 755
614.9 3304
609.0 3268 753
4314 6560 4064 599.6 3210 743
3942 22736 19320 4348 6612 4084 603.1 3232
741
Cng in OI 6.42 -0.18 5.74 1.89 26.14 3.65 -5.76 2.87 3.84
SUPPORT
3824 22596 19030 4266 6470 4053 597.2 3196
747
3893 22683 19205
Fresh Buying
LME DAILY STOCK POSITION ECONOMICAL DATA
DATA Previous
11:30am EUR German Industrial Production m/m 0.002 -0.009
TREND Fresh Selling Long Liquidation Fresh Selling Fresh Buying Fresh Selling Fresh Buying Short Covering Fresh Buying
11:30am EUR German Trade Balance 19.1B 19.3B
12:15pm EUR French Gov Budget Balance -58.8B -58.9B
12:15pm EUR French Industrial Production m/m 0.002 0.006
12:15pm EUR French Trade Balance -5.7B -6.2B
1:30pm EUR Italian Retail Sales m/m 0.002 -0.002
2:30pm EUR Revised GDP q/q 0.004 0.004
All Day EUR Eurogroup Meetings 0 0
6:00pm USD Average Hourly Earnings m/m 0.003 0.003
6:00pm USD Non-Farm Employment Change 191K 157K
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 12
-7750
-1750
-324
125
-1250
-9000
-8000
-7000
-6000
-5000
-4000
-3000
-2000
-1000
0
1000
COPPER ALUMINIUM NICKEL LEAD ZINC
LME STOCK
NEWS YOU CAN USE
Japanese Prime Minister Shinzo Abe vowed to proceed with next year’s scheduled sales tax hike “by all means” and take steps to ease an expected hit to consumption
from the higher levy. Abe said his ruling Liberal Democratic Party (LDP) won last year’s lower house election with a pledge to use proceeds from the sales tax increase to
make Japan’s social welfare system more sustainable. “We must accomplish this by all means,” Abe said in an interview with the economic daily, referring to his plan to
raise the tax to 10 percent from 8 percent in October next year. Abe twice postponed the tax hike after an increase to 8 percent from 5 percent in 2014 tipped Japan into
recession. Abe said the impact of the tax hike to 10 percent will be smaller than that of the increase to 8 percent. He also said the government will take measures to
moderate an expected downturn in consumption after the hike. Commenting on whether the government could declare an end to deflation even before inflation hits the
Bank of Japan’s 2 percent target, Abe said the key to the decision would be job growth. Japan’s economy is on track to mark its longest postwar expansionary period
thanks to robust exports and capital expenditure. The jobless rate has also slid to record-low levels that analysts say are near full employment. But inflation remains
distant from the BOJ’s price target as companies remain wary of raising prices for fear of scaring away cost-sensitive consumers.
China’s manufacturing activity grew at the slowest pace in more than a year in August, with export orders shrinking for a fifth month and employers cutting more staff, a
private survey showed. The gloomy findings reinforce views that China’s economy will cool further in coming months, even as the United States ramps up tariffs on
Chinese goods. That is likely to prompt more spending and other growth boosting steps from Beijing. The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI)
fell to 50.6 in August from July’s 50.8, matching forecasts. Though the index remained above the 50-point mark that separates growth from contraction for the 15th
consecutive month, it was the weakest since June 2017. While output improved modestly, most of the other readings were lackluster. The economy was already showing
signs of stress before the U.S. trade row flared. A regulatory crackdown on financial risks and debt was pushing up borrowing costs and making it tougher for firms to get
funding, sparking a growing number of defaults. But the steady reports of weaker export orders suggest the deepening trade dispute is now adding to that pressure, with
the impact starting to ripple through to China’s factory floors. New export orders - an indicator of future activity — have contracted for the longest stretch since the first
half of 2016, the Caixin PMI showed.
India is likely to export 7 million bales of cotton in 2018/19, down 30 percent from an earlier estimate, as scanty rainfall and an attack of pink bollworms are likely to
squeeze crop yields, the head of a leading trade body told. Lower shipments from the world’s biggest producer of the fibre amid rising demand from top consumer China
could support global prices, which on Monday were trading near their lowest level in over four months. A drop in planting area and the pest attack will limit overseas sales
to 7 million bales in the marketing year starting on Oct. 1, down from 7.2 million bales in the current crop year, said Atul Ganatra, president of the Cotton Association of
India. “In Gujarat and Maharashtra, rainfall was lower than normal. In some pockets, pink bollworm attacks have also been reported,” said Ganatra, who had forecast
exports of 10 million bales in June. Gujarat and Maharashtra account for more than half of the country’s total cotton production. Some regions of these two states
received as much as 22 percent less rainfall than normal, according to data compiled by India Meteorological Department. Export demand for shipments in 2018/19 is
robust but we could not sign deals due to uncertainty over crop size, said a Mumbai-based dealer with a global trading firm.
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 13
Date : Friday, September 07, 2018 URL : www.systematixshares.com Page No : 14
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