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Daily Commodity Roundup as on Monday, October 29, 2018
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 1
14.67CRUDE $
67.59
-0.01 -0.14 0.39
IN
TER
NA
TIO
NA
L M
AR
KET U
PD
ATE GOLD $
1233.40SILVER $
USDJPY111.889
-0.05 0.04 0.05EURUSD
1.1394GBPUSD
1.28347
LME
NICKEL
11850
0 -0.72 -0.25
LME
COPPER
6182 LME
ZINC
2635
$ INDEX96.44
-0.2 -0.05 -0.16
LME ALUMINIUM
2002 LME
LEAD
1996
DJIA24985
-1.01 -0.94 1.63SENSEX
33349NIFTY
10030
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 2
NIKKEI21165
0.19 1.86 -0.09USDINR
73.40 S&P
INDEX
2706
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MCX Gold Dec 2018
Gold prices rose as nervous investors retreated from stock markets and piled into the precious metal seen as a refuge from financial turmoil.
Gold on MCX settled up 0.24% at 31937 as nervous investors retreated
from stock markets and piled into the precious metal seen as a refuge
from financial turmoil. U.S. economic growth slowed in the third quarter,
but posted a better-than-expected reading that left the American
economy on track to post its best annual expansion in 13 years. In a
report, the Bureau of Economic Analysis said that GDP registered a
seasonally-adjusted annual rate of 3.5% growth in the three month
period from July to September, cooling from growth of 4.2%, which was
the strongest reading in four years. The reading beat consensus
expectations for an expansion of 3.3% and left the U.S. economy on track
to register 3% growth for the year as a whole, which would be the
strongest outcome since 2005. Investor flows into bullion, often
considered a safe haven and store of value during times of financial,
economic and geopolitical uncertainties, can be seen by the rise in
holdings of physically-backed exchange traded products. Gold demand in
India in the week was muted as a recent rally in domestic prices
prompted buyers to postpone purchases despite the approaching festival
and wedding season. Dealers in India were offering a discount of up to $7
an ounce over official domestic prices this week, unchanged from the last
week and the highest since mid-June. Holdings in the SPDR Gold Trust,
saw outflows of about 4.5 million ounces between late April and early
October. But now at 24.1 million ounces, holdings are at their highest
since the end of August. Technically now Gold is getting support at 31821
and below same could see a test of 31705 level, And resistance is now
likely to be seen at 32133, a move above could see prices testing 32329.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
31964
SUPPORT 3
32445 32329 32133 31821 31705 31509
32213 31901 31937 0.24 12886
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 3
Trading Ideas :Gold trading range for the day is 31705-32329.
The release of U.S. growth data, showed the economy slowed less than expected in the third quarter, had little lasting impact.
Gold demand in India in the week was muted as a recent rally in domestic prices prompted buyers to postpone purchases despite the approaching festival and wedding season.
Holdings in the SPDR Gold Trust, saw outflows of about 4.5 million ounces between late April and early October.
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MCX Silver Dec 2018
Silver prices gained as investors rushed to the safety of bullion as stock markets around the globe plunged.
Silver on MCX settled up 0.25% at 38712 as investors rushed to the
safety of bullion as stock markets around the globe plunged. Gains in
prices were helped by weakness on Wall Street and global equity
markets, which were in for their longest losing streak in five years. The
U.S. economy slowed less than expected in the third quarter as a tariff-
related drop in soybean exports was partially offset by the strongest
consumer spending in nearly four years, keeping it on track to hit the
Trump administration's 3 percent growth target this year. Gross domestic
product increased at a 3.5 percent annualized rate also supported by a
surge in inventory investment and solid government spending, the
Commerce Department said in its first estimate of third-quarter GDP
growth. While that was a slowdown from a 4.2 percent pace in the second
quarter, it still exceeded the economy's growth potential. U.S. consumer
price inflation was 2.3 percent in the year to September, according to the
Labor Department, and even “core” inflation, which strips out volatile food
and energy prices, is running at 2.2 percent for the year, above the
Federal Reserve’s target. Hedge funds and money managers trimmed
their net short position in silver contracts in the week to Oct. 23, the U.S.
Commodity Futures Trading Commission (CFTC) said. Speculators cut
their net short position in silver by 11,945 contracts to 21,209 contracts
to the smallest net short position in 10 weeks. Technically market is
under short covering as market has witnessed drop in open interest by -
7.47% to settled at 24979 while prices up 97 rupees, now Silver is
getting support at 38520 and below same could see a test of 38328 level,
And resistance is now likely to be seen at 38955, a move above could see
prices testing 39198.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
38673 39006
39390 39198 38955 38520 38328 38085
38571 38712 0.25 24979
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2 SUPPORT 3
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 4
Trading Ideas :Silver trading range for the day is 38328-39198.
Gains in prices were helped by weakness on Wall Street and global equity markets, which were in for their longest losing streak in five years.
The U.S. economy slowed less than expected in the third quarter offset by the strongest consumer spending in nearly four years.
Hedge funds and money managers trimmed their net short position in silver contracts in the week to Oct. 23, the U.S. CFTC said.
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MCX Crudeoil Nov 2018
Crude oil prices recovered from lows supported by expectations that sanctions on Iran would tighten global supplies, but prices posted a weekly drop.
Crude oil prices recovered from lows supported by expectations that
sanctions on Iran would tighten global supplies, but prices posted a
weekly drop as a slump in stock markets and concerns about trade wars
clouded the fuel demand outlook. Prices got some support when two
sources said on Friday Iraq will stop trucking crude oil from its northern
Kirkuk oil field to Iran in November to comply with U.S. sanctions.
Washington has said it wants to reduce Iranian oil sales to zero, although
this looks unlikely. Still, many buyers, including Iran's biggest customer,
China, appear to be falling in line, forcing Tehran to store unsold oil on
tankers. The recent market turmoil and forecasts for an increase in
supply have caused investors to pull back on bets on higher oil prices.
Hedge funds cut their bullish bets on U.S. crude to the most in more than
a year, according to U.S. Commodity Futures Trading Commission figures.
Saudi Arabia's OPEC governor said on Thursday oil markets could face
oversupply. "The market in the fourth quarter could be shifting towards
an oversupply situation as evidenced by rising inventories over the past
few weeks," Adeeb Al-Aama told. Saudi Energy Minister Khalid al-Falih
said there could be a need for intervention to reduce oil stockpiles. U.S.
crude production is soaring, boosted by technological advances. Output
this year is forecast to break the annual record in 1970. Technically
market is under short covering as market has witnessed drop in open
interest by -2.08% to settled at 8320 while prices up 4 rupees, now
Crudeoil is getting support at 4886 and below same could see a test of
4821 level, And resistance is now likely to be seen at 4998, a move
above could see prices testing 5045.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
4902 4980
5110 5045 4998 4886 4821 4774
4868 4951 0.08 8320
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2 SUPPORT 3
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 5
Trading Ideas :Crudeoil trading range for the day is 4821-5045.
Saudi Arabia's OPEC governor said the oil market could face oversupply in the fourth quarter.
U.S. crude oil stockpiles rose last week for the fifth consecutive week, while gasoline and distillate inventories fell, the Energy Information Administration said.
Saudi Arabia Energy Minister Khalid Al-Falih said there could be a need for intervention to reduce oil stockpiles after increases in recent months.
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MCX Copper Nov 2018
Copper prices dropped amid lingering fears about global trade and economic growth.
Copper on MCX settled down -0.69% at 444.7 amid lingering fears about
global trade and economic growth. The European Central Bank (ECB) kept
interest rates unchanged in their October policy meeting. The interest
rate on the main refinancing operation, the marginal lending facility, and
the deposit facility sit at zero, 0.25% and -0.40% respectively. The
expectation is that these rates will remain at their present levels at least
through the summer of 2019. Available LME inventories fell to their
lowest in nearly 13 years while cash copper traded at its highest premium
to the three-month future in nearly three years. Market open interest on
Shanghai copper fell to 495.476 lots, the lowest since Feb. 9, 2017, in a
sign that money is leaving the market. Miner and commodities trader
Glencore reported a 12 percent rise in copper production so far this year.
Other major miners reporting this month – BHP Billiton and Rio Tinto –
have signalled lower copper output. Copper stocks across Shanghai
bonded areas shrank by 1,200 mt from October 19 to 393,000 mt as of
Friday October 26, data showed. Limited overseas cargoes moved into
the bonded areas amid closed import arbitrage window, which has
remained closed for nearly a month. Separately, copper inventories
across LME warehouses in Asia stood below 20,000 mt, the lowest in
recent four-five years. Copper inventories in warehouses monitored by
the Shanghai Futures Exchange rose 5.8 percent from last Friday, the
exchange said. Technically market is under fresh selling as market has
witnessed gain in open interest by 6.65% to settled at 13415 while prices
down -3.1 rupees, now Copper is getting support at 441.7 and below
same could see a test of 438.7 level, And resistance is now likely to be
seen at 446.6, a move above could see prices testing 448.5.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
445.50
SUPPORT 3
451.5 448.5 446.6 441.7 438.7 436.8
445.50 440.65 444.70 -0.69 13415
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Copper trading range for the day is 438.7-448.5.
Available LME inventories fell to their lowest in nearly 13 years while cash copper traded at its highest premium to the three-month future in nearly three years.
Market open interest on Shanghai copper fell to 495.476 lots, the lowest since Feb. 9, 2017, in a sign that money is leaving the market.
Warehouse stock for Copper at LME was at 146350mt that is down by -3225mt.
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 6
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MCX Zinc Oct 2018
Zinc prices recovered tracking firmness in LME prices closed up by 0.60 percent as support seen after concerns over supply shortages.
Zinc on MCX settled up 0.3% at 198.45 as prices recovered tracking
firmness in LME prices closed up by 0.60 percent as support seen after
concerns over supply shortages. U.S. economic growth slowed in the third
quarter, but posted a better-than-expected reading that left the American
economy on track to post its best annual expansion in 13 years. In a
report, the Bureau of Economic Analysis said that GDP registered a
seasonally-adjusted annual rate of 3.5% growth in the three month
period from July to September, cooling from growth of 4.2%, which was
the strongest reading in four years. The global zinc market deficit
deepened to 76,200 tonnes in August from a revised deficit of 69,700
tonnes in July, data from the International Lead and Zinc Study Group
(ILZSG) showed. The July data was revised after it gave an initial
estimate for a deficit of 32,500 tonnes. In the first eight months of the
year the zinc market had a 292,000 tonne deficit, compared with a deficit
of 361,000 tonnes in the same period last year. The refined zinc market
looks super tight. London Metal Exchange zinc spreads are stressed, with
the cash-to-three-months premium hitting a one-year high of $63 per
tonne. LME stocks are low, at just 99,900 tonnes excluding metal
earmarked for physical load-out. ShFE stocks have rebuilt slightly since
the start of the month to 53,500 tonnes. But that's still well short of the
160,000 tonnes that were there as recently as April. Technically market is
under fresh buying as market has witnessed gain in open interest by
2.35% to settled at 4957, now Zinc is getting support at 196.3 and below
same could see a test of 194.1 level, And resistance is now likely to be
seen at 199.7, a move above could see prices testing 200.9.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
196.8
SUPPORT 3
203.1 200.9 199.7 196.3 194.1 192.9
198.8 195.3 198.5 0.30 4957
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Zinc trading range for the day is 194.1-200.9.
The global zinc market had a deficit of 292,000 tonnes in the first eight months of the year, the International Lead and Zinc Study Group (ILZSG) said.
London Metal Exchange zinc spreads are stressed, with the cash-to-three-months premium hitting a one-year high of $63 per tonne.
Warehouse stock for Zinc at LME was at 155225mt that is down by -2500mt.
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 7
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MCX Nickel Oct 2018
Nickel dropped as pressure after LME nickel fell more than 2 percent to its weakest since late December as a strong US dollar index and broadly risk-averse investors.
Nickel on MCX settled down -2.55% at 864.2 as pressure after LME nickel
fell more than 2 percent to its weakest since late December as a strong
US dollar index and broadly risk-averse investors. Pressure also seen
Shandong Xinhai, a large nickel pig iron (NPI) producer in east China
plans to commission new capacity at the end of this month, earlier than
the previously scheduled end of December. Nickel inventories in the
Shanghai bonded areas rebounded 1,000 mt, or 2.9% from last Friday to
stand at 35,000 mt as of October 26, data showed. With shipment
periods of about a month, forward cargoes for October started to grow
bonded area stocks on the week. Only a small amount of materials
moved from bonded areas to the domestic market, as the import
arbitrage window closed last week. Nickel ore inventories across all
Chinese ports grew 210,000 wmt from October 19 to 14.13 million wmt
as of Friday October 26, data showed. In metal content, stocks gained
2,000 mt for the same period and stood at 118,000 mt. Stocks across
seven major Chinese ports rose by 230,000 wmt to 10.07 million wmt.
The global nickel market deficit narrowed to 7,100 tonnes in August from
the previous month's revised deficit of 16,500 tonnes, the International
Nickel Study Group (INSG) said. During the first eight months of the year
the deficit widened to 102,600 tonnes from 60,800 tonnes in the same
period of 2017, the data showed. Technically market is under fresh selling
as market has witnessed gain in open interest by 3.41% to settled at
14912, now Nickel is getting support at 853.8 and below same could see
a test of 843.4 level, And resistance is now likely to be seen at 882.3, a
move above could see prices testing 900.4.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
885
SUPPORT 3
910.8 900.4 882.3 853.8 843.4 825.3
890 861.5 864.2 -2.55 14912
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Nickel trading range for the day is 843.4-900.4.
Nickel inventories in the Shanghai bonded areas rebounded 1,000 mt, or 2.9% from last Friday to stand at 35,000 mt as of October 26, data showed.
Stocks across all Chinese ports grew 210,000 wmt from Oct 19 to 14.13 million wmt as of Friday Oct 26.
Warehouse stock for Nickel at LME was at 219456mt that is down by -198mt.
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 8
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NCDEX Jeera Nov 2018
Jeera prices dropped on profit booking after prices seen supported amid concerns over production amid prevailing high temperature.
Jeera on NCDEX settled down -1.24% at 19570 on profit booking after
prices seen supported amid concerns over production amid prevailing
high temperature. According to the trade sources, lack of sufficient rains
in some jeera growing regions in Gujarat and Rajasthan, two top
producers, may impact the sowing that will begin by the end of the
month. However, those regions which have good irrigation facilities will
have good output. According to the initial trade estimate, there may not
be any increase in the sowing area of jeera because of dry weather.
However, if the producing states receive good rains in November, then
the sowing area could see an increase. The overseas demand for Indian
jeera is expected to increase as the supply from other origins like Turkey
and Syria are limited and of poor quality. Although Indian jeera is priced
higher in the global market, it is drawing more buyers because of superior
quality. According to the DGFT, Indian jeera exports from April to August
in 2018-19 is reported at 0.94 lakh MT which shows exports of jeera is
expected to be higher in 2018-19 than 2017-18. Indian jeera exports are
reported at 1.44 lakh MT in 2017-18 which is 31.8 per cent higher than
the 2016-17 exports of 1.09 lakh MT. As per the Ministry of Agriculture,
Cumin production in India for 2017-18 is estimated at 5 lakh tonnes as
against 4.95 lakh tonnes in 2016-17. Technically market is under long
liquidation as market has witnessed drop in open interest by -9.01% to
settled at 5664 while prices down -245 rupees, now Jeera is getting
support at 19400 and below same could see a test of 19230 level, And
resistance is now likely to be seen at 19770, a move above could see
prices testing 19970.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
19800
SUPPORT 3
20140 19970 19770 19400 19230 19030
19800 19430 19570 -1.24 5664
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Jeera trading range for the day is 6523-6523.
Cumin production in India is estimated at 5 lakh tonnes as against 4.95 lakh tonnes in 2016-17.
NCDEX accredited warehouses jeera stocks dropped by 96 tonnes to 2642 tonnes.
In Unjha, a key spot market in Gujrat, jeera remains unchanged at0 rupees to end at 19838 rupee per 100 kg.
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 9
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NCDEX Turmeric Nov 2018
Turmeric prices ended with flat node after prices seen supported on strong demand in the physical market and subdued stock.
Turmeric on NCDEX settled up 0.09% at 6674 on strong demand in the
physical market and subdued stock. Demand for turmeric rises during
festivals as traders stock more produce during this period to meet the
demand. Turmeric exports surged by 52.66% to 12,044.52 tons in August
compared to 7,889.68 tons in the same period a year ago, according to
Ministry of Commerce data. Turmeric exports jumped by 9.7% to 56.483
tons during Apr-Aug compared to 51.447 tons in the corresponding period
last year. Meanwhile, turmeric arrivals in Sangli mandi were 1,500 bags
(60 Kg/bag) while the arrivals on October 19 were 2,000 bags. Turmeric
output in Erode, which had slumped last year on the back of two
consecutive droughts, is set to witness a rebound, if planting area is any
indication. According to the Department of Horticulture and Plantation
Crops of Tamil Nadu, acreage of turmeric in Erode may jump nearly 80%
on year to 5,300 ha in 2018-19 (Jul-Jun) because of very good rainfall
this year and availability of other water sources. In 2017-18, area under
the spice in Erode, India's third largest producing region, was 2,956 ha,
the horticulture department official said. Acreage of the spice had risen
from around 5,000 ha in 2014-15 to 6,293 ha and a record high of 8,988
ha in the two subsequent years, mainly due to a rise in processing units
in the vicinity. Technically market is under fresh buying as market has
witnessed gain in open interest by 1.43% to settled at 12450 while prices
up 6 rupees, now Turmeric is getting support at 6637 and below same
could see a test of 6599 level, And resistance is now likely to be seen at
6705, a move above could see prices testing 6735.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
6660
SUPPORT 3
6774 6736 6706 6638 6600 6570
6698 6630 6674 0.09 12450
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Turmeric trading range for the day is 6600-6736.
Acreage of turmeric in Erode may jump nearly 80% on year to 5,300 ha in 2018-19 (Jul-Jun) because of very good rainfall this year
NCDEX accredited warehouses turmeric stocks gained by 338 tonnes to 3303 tonnes.
In Nizamabad, a major spot market in AP, the price ended at 6959.3 Rupees gained 18 Rupees.
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 10
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MCX Menthaoil Nov 2018
Mentha oil dropped as spot markets are witnessing low demand amid adequate supply which weighed on prices.
Menthaoil on MCX settled down -0.2% at 1798.6 as spot markets are
witnessing low demand amid adequate supply which weighed on prices.
Low demand outlook in mentha oil in domestic as well as global market
due to expectation of recovery in Indian Rupee against the U.S dollar.
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. Mandi Department, which assumes Mentha as an agricultural
product and receives the mandatory duty of one and a half percent, the
GST of the same commerce tax department, Mentha crop, is not
considered as agricultural product and 15 percent GST is charged. Due to
this double tax, the price of mentha product increases, whereas synthetic
mentha is much cheaper, so many companies making mentha products
have started using synthetic mentha. technically market is under fresh
selling as market has witnessed gain in open interest by 1.05% to settled
at 1353 while prices down -3.6 rupees, now Menthaoil is getting support
at 1787.8 and below same could see a test of 1776.9 level, And
resistance is now likely to be seen at 1814.8, a move above could see
prices testing 1830.9.
OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST
1815.00
SUPPORT 3
1841.8 1830.9 1814.8 1787.8 1776.9 1760.8
1820.00 1793.00 1798.60 -0.20 1353
RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2
Trading Ideas :Menthaoil trading range for the day is 1776.9-1830.9.
Mentha oil spot at Sambhal closed at 1926.50 per 1kg. Spot prices was down by Rs.-2.80/-.
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.
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 11
TIME ZONE Forecast
CommodityLME STOCK Stock
COPPER -3225 146350
ALUMINIUM -350 1049175
NICKEL -198 219456
LEAD -600 111875
ZINC -2500 155225
3952 23140 19570 4714 6674 4196 567.2 3270
DAILY MARKET TRADING LEVEL
COMMODITIESNCDEX CHANA Nov
2018
NCDEX Cotton Oct
2018
NCDEX Jeera Nov
2018
NCDEX Guarseed10
Nov 2018
NCDEX Turmeric
Nov 2018
NCDEX Rmseed Nov
2018MCX CPO Oct 2018
NCDEX Soyabean
Nov 2018
NCDEX
Ref.Soya oil
Nov 2018
751.15CLOSE
P. POINT 3964 23170 19600 4730 6668 4200
3988 23240 19770 4765 6706 4226
RESISTANCE
4047 23400 20140 4851 6774 4282
570.1 3279 753
769
4023 23330 19970 4816 6736 4256 584.3 3343 764
589.9 3370
575.7 3306 758
4644 6600 4144 555.9 3215 742
3929 23080 19400 4679 6638 4170 561.5 3242
736
Cng in OI -6.04 -29.38 -9.01 1.99 1.43 -8.13 -40.77 -1.45 -3.26
SUPPORT
3870 22920 19030 4593 6570 4114 547.3 3178
747
3905 23010 19230
Long Liquidation
LME DAILY STOCK POSITION ECONOMICAL DATA
DATA Previous
6:00pm USD Core PCE Price Index m/m 0.001 0
TREND Long Liquidation Short Covering Long Liquidation Fresh Selling Fresh Buying Long Liquidation Long Liquidation Long Liquidation
6:00pm USD Personal Spending m/m 0.004 0.003
6:00pm USD Personal Income m/m 0.004 0.003
Tentative USD Loan Officer Survey 0 0
0:00 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 12
-3225
-350-198
-600
-2500
-3500
-3000
-2500
-2000
-1500
-1000
-500
0
COPPER ALUMINIUM NICKEL LEAD ZINC
LME STOCK
NEWS YOU CAN USE
Euro zone business growth slowed much faster than expected this month, dragged down by waning orders that put a big dent in confidence, adding to evidence the bloc’s
halcyon days are behind it for now, a survey showed. October’s disappointing survey is likely to concern policymakers at the European Central Bank, who are expected to
end their bond-buying programme in less than three months, despite a slew of political and trade concerns. The economic slowdown comes amid an escalating trade war
between the United States and China, a spiraling debt dispute in Italy, deadlocked Brexit negotiations and the prospect of steadily tightening financial conditions. ECB
policymakers have slowly trimmed asset purchases, hoping they have done enough to bolster growth and inflation and are expected to hold policy steady on Thursday -
despite evidence euro zone growth momentum peaked some time ago. IHS Markit said if the survey levels were maintained, they pointed to fourth quarter growth of 0.3
percent. That would be the slowest pace in 2 1/2 years and below the 0.4 percent predicted. Earlier figures from Germany, Europe’s biggest economy, showed private-
sector growth slowed to its weakest in more than three years as manufacturing and services both lost momentum.
Private sector output in Germany deteriorated in October, as business activity rose at the weakest pace in almost three-and-a-half years, according to survey data. The
closely-watched report underlined worries that the euro zone's largest economy may be losing steam heading into the fourth quarter, raising concerns about the potential
fallout from a global trade war. Market research group Markit said that its Flash German Composite Output Index, which measures the combined output of both the
manufacturing and service sectors fell to 52.7 this month, the lowest since May 2015, from 55.0 in September. Economists had forecast a reading of 54.8. The flash
manufacturing purchasing managers’ index slumped to 52.3, the lowest in 29 months, from a final reading of 53.7 in September. Analysts had expected the index to slip
to 53.5. The preliminary German services purchasing managers’ index declined to a five-month low of 53.6 this month, down from 55.9. That was below expectations for a
reading of 55.5. On the index, a reading above 50.0 indicates industry expansion, below indicates contraction. The slowdown in business activity growth was partly
attributable to a weaker trend in new orders, which displayed the smallest monthly rise since June 2015.
Cotton Corp of India, which had earlier announced launching procurement on Oct 1, is unlikely to start full operations till Diwali as prices in most markets have jumped
above the minimum support price, sources said. The Centre has fixed minimum support price for the medium-staple variety of cotton at 5,150 rupees per 100 kg, and
that for long staple at 5,450 rupees per 100 kg, both 1,130 rupees higher than last year. Arrivals of cotton across major spot markets in India were pegged at 68,500
bales of which 11,000 bales arrived in Haryana, 15,000 bales in Rajasthan and 7,000 bales in Punjab. Arrivals in Maharashtra and Telangana were pegged at 4,000 bales
and 5,000 bales, respectively. Rising opinions that output in 2018-19 (Oct-Sep) might be much lower than initial estimates of 35 mln bales, and the US Department of
Agriculture lowering its estimate for India's 2018-19 ending stock also augurs well for prices. Looking at prolonged dry spell in Aug-Sep in Gujarat, Maharashtra and parts
of Rajasthan, cotton production is likely to take a severe hit, but the situation will become clear only after November when arrivals peak. The Cotton Association of India
has pegged the country's production in 2018-19 at 34.8 mln bales, down nearly 5% from a year ago. The US agriculture department lowered its estimate for India's
ending stock of cotton for the current season to 8.98 mln bales) from 11.88 mln bales projected in September.
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 13
Date : Monday, October 29, 2018 URL : www.systematixshares.com Page No : 14
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