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Commodity World Roundup

03rd June – 8th June- RBI policy, Asian currencies, Venezuela are creating triggers

RBI Policy, Asian Currencies, and Venezuela

10-year bond yield near 8%

June 08, 2018

India’s 10-year benchmark bond yield closed near 8% (which is its highest in the last three years) on Thursday post the Reserve Bank of India’s (RBI) decision to increase the policy rate by 25 basis points. Further, the 10-year bond yield closed at 7.993%, a level which was last seen on May 7, 2015. Bond yields and bond prices move in opposite directions.

Source: www.mydigitalfc.com

Asian currencies face crucial test

June 08, 2018

Emerging Asian currencies bounced back in the last few days as oil prices declined. However, the recovery will face a critical test when major crude producers meet in Vienna in June. Energy exporting nations met in the Austrian capital on 22nd June to decide whether to maintain output curbs or revive production as suggested by Saudi Arabia and Russia. Indian Rupee and Indonesian Rupiah have strengthened about 2% since 25th May post the Saudi-Russia talks.

Source: DBS Treasures

RBI hikes repo rate by 25 bps

June 07, 2018

The Reserve Bank surprised many with a 25bps increase in the benchmark interest rates – the first in four years as inflationary pressures had increased due to increased crude and commodity prices. However, the RBI has retained a neutral stance, indicating that it would be flexible towards challenges without compromising on the economic recovery. It has also raised the inflation forecast for the fiscal year as core inflation remains stubborn at higher levels due to elevated crude prices, though the threat from food prices has eased. It has also retained growth estimates for the year as investment demand is complimenting economic expansion.

Source: ET Bureau

Sugar industry cheers sugar package but MSP AT ₹29/KG is low

June 07, 2018

Analysts feel that the minimum selling price of ₹29/kg is inadequate even though the government’s decision to create a buffer stock of about 3 million tonnes of sugar and give subsidised credit to enhance ethanol production capacity was welcomed. The government’s decision was welcomed and would help the struggling sugar mills and sugarcane farmers. Some surplus sugar from the market would be reduced due to the creation of the buffer stock of 3 mt, though only for a year.

Source: The Hindu Business line

Cash strapped Venezuela’s PDVSA may force majeure on oil exports

June 07, 2018

Other OPEC members may boost production to compensate for the shortfall as Venezuela’s oil production has been falling consistently; this fall in production has also helped the WTI and Brent prices to touch four year highs. The cash strapped Venezuelan government has failed to do enough investments in the oil and gas industry to prevent its decline. PDVSA has informed their customers that they should send ships which can accept ship to ship oil transfers as it is currently unable to load oil from port onto the ships. If this condition is not met, then the company would consider force majeure, declaring its contracts incapable of being executed.

Source: Reuter

Trading volumes at the GIFT city have increased

June 06, 2018

Trading volumes at the GIFT city (Gujarat International Finance Tec-city) have increased off late in both the BSE and NSE segments. GIFT city is India’s only international financial service centre. The INX, which is a BSE sponsored India International Exchange, recorded its highest daily turnover of 665 million which is about Rs. 4,500 crore on 31st May 2018.

Source: Economic times

RBI noted a significant decline in imports of gold

June 06, 2018

Taking stock of India’s trade position, RBI said that India’s exports grew in April 2018 after a marginal dip in the preceding month, supported mainly by non-oil exports, particularly engineering goods and chemicals. Even as the impact of rising global crude oil prices weigh on India’s trade, India’s central bank - RBI noted that a significant decline in imports of gold as well as pearl and precious stones has more than offset the impact of rising crude oil prices.

Source:Financial Express

WTI and Brent Crude Spread rises

June 04, 2018

Global oil markets have been roiled by a surprising divergence between the world’s major benchmarks - Brent crude and its US counterpart, which in recent days have traded at odds with one another, wrong footing investors betting on the exact opposite. These spreads are currently near $11 per barrel which has put WTI at a huge discount compared to Brent crude oil.

Source: Economic times

SGX Issue impacting Nifty Futures trading

June 03, 2018

The dispute between the National Stock Exchange and the SGX seems to be having an impact on Nifty futures trading. Interest in India’s top traded derivative index has witnessed a fall since February this year. Coincidentally, the dispute between SGX and the National Stock Exchange (NSE) started in February, when the NSE announced its withdrawal from an 18-year-long agreement with the Singapore bourse. Key resistances are poised at ₹3,900 and ₹4,000 which can cap the upside in the short term.

Source: Business Line

Russia breached its oil-output quota agreed with OPEC - June 03, 2018

June 03, 2018

Russian Oil output averaged 10.97 million barrels a day in May, almost unchanged from a month earlier, according to data emailed Saturday by the Energy Ministry’s CDU-TEK statistics unit. Russia breached its oil-output quota agreed with OPEC for a third straight month as the producing alliance prepares for crucial talks this month on increasing supplies. This means its compliance with the production quota of 10.95 million was close to 95 per cent, which was the same as in April. In March, the rate was 93 per cent.

Source: Business Standard