Gold drops on optimism over US-China trade talks, copper bounces from two year lows & nickel prices rally over export ban in Indonesia

31st Aug – 06th Sept

1. US employment situation improved further in August ; U.S. companies added most jobs in four months

Sept 05, 2019

U.S. companies added the most jobs in four months in August while jobless claims stayed low last week. ADP employment change reading showed that 195,000 jobs were created, which is the highest reading since April. Eyes are on the US non-farm payroll data later today. The August jobs report is expected to be strong, and economists target employment to increase by 160,000.

Source: Bloomberg

2. Gold drops, treasury yields jump on the positive developments on US-China trade

Sept 05, 2019

Treasury yields jumped on the positive developments on US-China trade as well as the strong U.S. data. Gold prices dropped as the risk premium reduced after US & China agreed to talk again in October to discuss tariff issues. The Dollar Index found support from strong economic data. Gold prices dropped nearly 2% from optimism over US-China trade talks and positive ADP employment data.

Source: CNBC

3. Indian rupee regained strength against the US dollar following a recovery in domestic equities

Sept 04, 2019

The rupee rose against the US dollar moving further away from the year's lowest level of 72.40 touched this week. The gains in the domestic stock markets led to the appreciation.

Source: NDTV

4. Crisil lowers India's GDP growth forecast to 6.3%

Sept 04, 2019

Rating agency Crisil lowered India’s fiscal year 2020 GDP growth forecast to 6.3% from its earlier forecast of 6.9%, after the economy grew 5% in the first quarter, which was its slowest in almost 6 years. The lower GDP growth forecast indicates that India’s economic slowdown is deeper and more broad-based than suspected. India's Gross Domestic Product (GDP) grew 5 percent in April-June 2019; the GDP growth was 8 percent in the same quarter of 2018-19.

Source: Economic Times

5. Copper bounced from two year lows

Sept 04, 2019

Copper bounced after China and the United States agreed to hold trade talks next month and U.S. manufacturing data encouraged investors to engage in arbitrage trade. The United States and China have agreed to return to the negotiating table in Washington to discuss trade in ‘early October’. It will be the first face-to-face meeting between the two sides after new escalations in the last few weeks.

Source: Reuters

6. China has announced to cut the target rate in the country

Sept 04, 2019

China’s cabinet signaled a reduction in the amount of funds banks have to hold, known as RRR, in a move aimed at enhancing credit to the slowing economy. The People’s Bank of China last made a broad cut to the required reserve ratios in January, after a similar announcement by the State Council meeting in December.

Source: Bloomberg

7. LME Nickel prices at five year highs as Indonesia announced stoppage of nickel exports as of Jan. 1

Sept 02, 2019

The Energy and Mineral Resources Ministry has announced stoppage of nickel exports from Jan’20 next year. The supply situation may worsen due to the Indonesian export ban while nickel demand is likely to remain firm as regards the EV industry. According to the Coal and Minerals Director, nickel ore exports ban is in line with the national plan to accelerate the establishment of smelters so that Indonesia could sell value-added nickel products such as stainless steel slabs.

Source: Economic Times

8. Russia boosted oil production in August, exceeding OPEC+ cap for production

Sept 03, 2019

Russia’s oil production increased to 11.29 million bpd in August, up from 11.15 million bpd in July, and is exceeding Russia’s cap under the deal. Russia, OPEC’s key partner in the OPEC+ coalition, to curb output to support oil prices. However, Russian Energy Minister Alexander Novak affirmed that Russia was still looking to comply in full with its share of the cuts.

Source: Oil Price