Futures

Trading Discussion Currencies
42

INDIAN INR
MARKETS
INR weakens 0.3%, (April 4 low) to 54.6862. 1-month volatility increases 11 bps to 7.64%. 12-month NDFs drop 0.2% to 58.19. 1-year IRS at 7.3600%, 5-year IRS at 7.1350%. 10 Year Benchmark at 7.854%.
FACTORS
• Technical: Pivot at 54.5088; support 54.6525, 54.7800; 55.0514; resistance 53.9662, 54.2375, 54.3812; Touches 200-DMA 54.6170
• FORECAST: WPI (inflation) at 6.27% in March (3 Year Low)
GOLD
MARKETS
Gold spot down 3.9 % to $1,425.75 and was trading at $1,444.07 in Asian hours . Prices fell 5 % on April 12, taking losses to more than 20 % since the lifetime high in September 2011. Gold June down 5.3 % to $1,422.20. The contract had fallen 4.1 % on April 12. Silver fell 6.8 % to $24.24 (November 2010 Low)
FACTORS
• Cyprus may sell its gold holdings to cover possible losses from emergency loans.
• Gold ETF fell to 2,406.16 MT on April 12 down 6.9% in Quarter 1 , 2013
• Goldman cut its three-month target to $1,530 from $1,615
• Gold fell in spite of the USD Index, falling 0.3 %.
• George Soros cut his stake in the SPDR gold fund by 55 %
FOREIGN EXCHANGE
MARKETS
The USD bought 98.36 yen, above Friday’s session low of 98.08 yen, though still well shy of a four-year peak of 99.95 yen struck on trading platform EBS on Thursday.
FACTORS
• United States they would ensure Japan’s policies were not aimed at weakening its currency.
• Chinese GDP growth unexpectedly slows.
• UK : Ernst & Young-GDP will rise 0.6 %, compared with a January forecast of 0.9 %.
• Cyprus Issues 8th Decree on Capital Controls, Eases Some Rules.

COPPER
Copper edged up on Monday on technical buying, but was within reach of 8-month lows after poor data spurred fears the U.S. recovery may be slowing and dragging on the global economy, with attention turning to a raft of Chinese data later in the day. 3-month copper had risen to $7,435.50- paring losses from the previous session.

OIL
Brent crude oil fell to a 9-month low near $101 on Friday as a broad investor sell-off in commodities triggered a fall as much as $3 , but pared losses in afternoon New York trade .
Brent May fell more than $3 to hit a $101.09, the lowest prices since July. It recovered by more than $2 by the close, settling at $103.11 down $1.16 on the day. Brent has fallen by around 13 % since February as uncertainty about the strength of global demand has mounted.
U.S. crude for May delivery lost $2.22 to settle at $91.29 , up from an earlier low of $90.27. The May contract closed below its 200-day moving average of $91.51, a key technical indicator watched by traders.

43

INDIAN INR
MARKETS
INR falls 0.1% to 54.0440. 1-month volatility rises 4 bps to 8.6175% . 12-month NDF at 57.223, 3-month forwards at 55.03 vs. 54.93 , 3-Month NDF at 54.78 vs. 54.74. 10Y Benchmark at 7.774% . 1-yr IRS at 7.2650% while 5-yr IRS at 7.0150%.
FACTORS
• Technical: INR 0.3% above 50 DMA at 54.2149.
• Global funds increased holdings of debt by $247.1 m, to $34.62 b.
• India’s current-account deficit eased after Brent slipped 9 % and gold fell 11 %.
GOLD
MARKETS
Gold spot up 1.4 % to $1,423.10. Gold June up 1.8 % to $1,420, gaining for a 3rd day . Silver up 1.1 % to $23.504 rising for the first time in four days
FACTORS
• U.S. Mint has sold 167,500 ounces in April, vs. 62,000 ounces in March
• Chinese Gold & Silver Exchange Society in Hong Kong, has run out of physical gold
• India, gold imports may jump by 36 % in the 3-months through June .
• GOLD ETF fell for the 14th day to 2,340.618 MT (Nov. 11 Low)
• GOLD Funds increased net-long positions in gold by 9.8 % to 61,579 futures
• One ounce of gold bought 60.8278 ounces of silver today (Sep. 2010 High)
FOREIGN EXCHANGE
MARKETS
USD climbed 0.3 % to 99.83 yen, having risen as high as 99.90 in early Asian trade on Monday.
FACTORS
• FORECAST : US GDP Q1 2013- 3.1 % vs. 0.4 % in Q4 2012.
• Bank of Canada Governor said interest-rate increases depends on growth more than 2 %.
• ECB’s Knot Says Economic Data Show Risks ‘On the Downside’.
• Bank of England to buy another 80 billion pounds ($122 billion) of bonds.
• PBOC’s Zhou Says China Must Sacrifice Growth to Reform.

COPPER
Copper retreated towards 18-month lows below $7,000 on Monday, as sluggish global growth tempers industrial demand and erodes investor appetite for metals. 3-month copper fell by 0.93 % to $6,935 extending losses from the previous session.

OIL
Brent crude near $100 on Monday, finding some support from bargain hunters after 3 straight weeks of lower prices . June Brent rose 28 cents to $99.93 up from the lowest level since July 2012 on Wednesday. U.S. crude for June delivery was up 29 cents to $88.30 a barrel after a 3.6 % loss last week.

44

INDIAN INR
MARKETS
INR falls for 2nd day by 0.4% to 54.35 . 1-month volatility at 8.65% . 3-month forwards at 55.33 USD, vs. 55.15. 3-Month NDF at 55.12 vs. 54.93. 10 Year Benchmark at 7.750%. 1-year IRS at 7.25% . 5 year IRS at 7.00%.
FACTORS
• Technical: Breaking pivot support at 54.2858 with next 2 supports at 54.4254, 54.7454; pivot point at 54.1054; resistance at 53.9658, 53.7854, 53.4654. Pulling away from 50 DMA at 54.2379.
• Global funds increased holdings of debt by $630 m, to $35.25 b .
• China PMI fell to 50.5 in April from 51.6 in March, holding above the dividing line of 50.
• Purchases of existing homes in the U.S. fell to 4.92 m annual rate vs. 4.95 m in Feb.
• Markets will be shut tomorrow for the Mahavir Jayanti celebrations.
• Oil trade (all-time high ) 6.3 % of GDP in 2012,
• Gold trade (all -time high) 3 % of GDP.
GOLD
MARKETS
Gold rose 0.3 % to $1,430.52 . Gold rose for 5 days with a high of 1,439.30. Prices are 8.4 % below the $1,561.45 close on April 11, before a 2-day, 14 % drop through April 15. Gold June rose 0.5 % to
$1,428.30, gaining for a 4th day. Cash silver dropped 0.5 % to $23.324.
FACTORS
• Gold has fallen 15 % in 2013
• Gold touched a 2-year low of $1,321.95 on April 16
• U.S. Mint has sold 175,000 ounces in April, Vs. 62,000 ounces sold in March.

FOREIGN EXCHANGE
MARKETS
USD did not reach 100 yen due to option positions . USD at 99.35 yen, down from Monday’s high near 99.90.Traders said there is demand to buy dollar/yen on dips and a clear break above 100 will pave the way for a retest of the April 2009 high around 101.45.
FACTORS
• Yen Gains as China Manufacturing Growth Slows.
• CAD Gains Versus Most Major Peers as Crude Oil Rises.
• U.K. refuses Pound for Independent Scotland Citing Euro Lessons.
• GBP gains vs. Euro on opinion that U.K. avoided another “Recession”.
• Yuan Advances to Near 19-Year High as PBOC Raises Reference Rate.

COPPER
Copper slipped on Tuesday and was near a 18-month low on sluggish prospects for global growth, with traders waiting for China’s first economic report for the second quarter for clues on demand . 3-month had slipped 0.36 % to $6,910 extending losses from the previous session when it closed down 0.8 %

OIL
Brent crude rose for a 3rd session to top $100 on Monday, lifted by gains in the U.S. stock market. Brent June rose 74 cents to close at $100.39 , down from a high of $101.04. WTI May was up 75 cents to $88.76 after reaching a high of $89.13.

45

INDIAN INR
MARKETS
INR advanced 0.2 % to 55.03 ,it had touched 55.1350 yesterday. 1-month volatility, fell 5 BP to 8.43 %. 3-month forwards at 55.95 vs. 56.04. 3-Month NDF were at 55.82 vs. 55.88.
FACTORS
• Inflation eased to a 41-month low (4.89 % in April)
• Global funds bought $883 million of shares last week
• Global holdings of ll debt rose to a record $38 Bln on May 17.
• Auction of $1 Bln of sovereign debt-purchase permits was oversubscribed yesterday.
• Current account deficit rose to 5% of GDP (Record High)
• Bernanke : 22nd May : U.S. economic outlook for a Joint Economic Committee of Congress.

GOLD
MARKETS
Gold fell on Tuesday for the 8th of 9 sessions. Gold had fallen 0.3 % to $1,388.36 in Asian hours . Gold gained 2.6 % on Monday after a seven-session slide to cross the 1400$ mark .Gold futures gained 0.2 % to $1,386.90. Silver was down 1.4 % at $22.61. It hit a session low of $22.41, not far off the 2-1/2 year low of $20.84 on Monday, when it eventually closed 3 % higher.
FACTORS
• Gold fell as the USD appreciated
• Opinion: Fed may soon stop its monthly $85-Bln bond purchases.
• Holdings of the largest ETF, the iShares Silver Trust have fallen to their lifetime low
• SPDR Gold Trust holdings down to 1,031.50 MT (4 year low)
• Physical demand in India, down after a rise of 138 % in April.

FOREIGN EXCHANGE
MARKETS
USD rose 0.2 % to 102.69 JPY after economics minister Akira Amari said he hoped the JPY settles at a level justified by fundamentals and where the impact on imports and exports is balanced. GBP rose 0.1 % to $1.5289, paring gains after earlier climbing to as high as $1.5368
FACTORS
JPY Falls Versus Peers After Amari Remarks
U.S. Faces Downgrade in 2013 Without Budget Deal, Moody’s Warns
Pound Gains From Six-Week Low Versus USD; Gilts Decline

COPPER
MARKETS
3-month copper slipped 0.41 % to $7,369, reversing gains of more than 1 % from the previous session.
FACTORS
• Opinion of slowing demand growth in China
• Key factory figures this week from US .
OIL
MARKETS
WTI June at $96.89 up 18 cents, . The contract expires today. The volume of all contracts traded was 18 % below the 100-day average. The more active July future rose 20 cents to $97.13. Front-month prices increased 69 cents yesterday, or 0.7 %, to $96.71, the highest close since April 2. Brent July up 23 cents to $105.03. Brent was at a premium of $7.90 to WTI futures.
FACTORS
• Forecast to show the first back-to-back decrease in stockpiles this year. (800,000 barrels)
• U.S. Memorial Day on May 27 marks the start of the nation’s peak driving period.
• U.S. refineries operated at 88.4 % of capacity in the week of May 17, up 0.4 %.
• Syrian government forces started an offensive against rebels.
• Middle East accounted for 33 % of global oil output in 2011.

46

INDIAN INR
MARKETS
INR drops 0.2% to 55.7350, heading for 8th day of losses, longest stretch since November 2011. 1-month volatility slides 11 bps at 8.9925% (2013 Average 9.0126%) . 1-month NDF climbs 0.2% to 59.05; 12-month NDF rises 0.2% to 59.07. Overnight inter-bank rate at 7.30% . 10 Year benchmark At 7.11
FACTORS
• Technical: Pivot point at 55.6200; support at 55.7875, 55.9300, 56.2400; resistance at 55.4775, 55.3100, and 55.0000. USD/INR’s 14-day RSI climbs to 75.7, above overbought level, and upper Bollinger band is at 55.9487
• 5% withholding tax on interest accrued on Indian debt for global investors

GOLD
MARKETS
Spot gold had dropped 0.03 percent, or 36 cents, to $1,385.19 a not far from two-year lows of $1,321.35 seen in mid-April. Gold is headed for its fifth straight monthly drop.
FACTORS
• Italy failed to meet its maximum target at a debt sale.
• Greek poll showed gains for parties opposed to austerity.
• Japan’s industrial production rose less than forecast in April.
• Correlation: Gold and the USD at - 0.301, compared with - 0.169 in October.
• Russia and Kazakhstan expanded their gold reserves for a 7th month.
• Russian holdings, ( 7th-largest) at 990 MT up 3.4 % in 2013 and up 8.5 % in 2012.

FOREIGN EXCHANGE
MARKETS
The USD dipped against the JPY in early Asian trade. USD at 101.13 falling 0.1% from Friday (low of of 100.68) down 1.9 % in the week.
FACTORS
• BOJ Governor Kuroda “nation could cope with rising interest rates.” . JPY rises
• Yuan at a 19-year high. PBOC fixing up 0.09 % : 6.1811 CNY / USD.
• Nobel Prize economist Joseph Stiglitz said premature for the Fed to reduce stimulus .
• FORECAST: US Consumer Spend no change in April (0.2% rise in March)
• U.K. House Prices Rise Most in 6 Years on London Demand (0.4%)

COPPER
MARKETS
Copper 3M fell 0.01 % to $7,299 . Copper July was flat at $3.2945 a pound. Copper September fell as 1.3 % to $8,523 a MT.
FACTORS
• US: Orders for durable goods increased more than forecast in April
• EZ: German business confidence increased in May for the first time in 3 months
• China’s President Xi Jinping said “won’t sacrifice the environment to ensure short-term growth”
• Profits of nonferrous metals mining and smelting companies declined 3.5 % and 8.3 % in 2013

OIL
MARKETS
WTI July fell 92 cents and was at $93.23. The volume of all contracts traded was 23 % below the 100-day average. Brent July fell 54 cents to $102.10 . Brent was at a premium of $8.81 to WTI .
FACTORS
• OPEC, to keep its output target unchanged .
• OPEC’s production at 30.5 million barrels a day in April.
• Hedge funds raised bullish bets on WTI to the highest level in more than a year
• Net -long positions, at 231,794 futures and options (March 2012 High)

47

INDIAN INR
MARKETS
INR fell 0.2 % to 55.675 (Low of 56.0150 May 23). INR has declined 3.4 % in May. 1-month volatility, fell 15 BP. to 8.99 %. 3-month forwards at 56.50 Vs. 56.46 . 3-Month NDF at 56.56 Vs. 56.45.
FACTORS
• US: Forecast: consumer sentiment highest level since Nov.
• US: S&P/Case-Shiller Index property values in 20 cities rose most since April 2006
• RBI: Lenders cannot make loans using units of gold exchange-traded funds as collateral.
• RBI: May 13: Imports of Gold by banks on a consignment basis to only for exporters.
• Global funds bought a net $14.5 Bln. of Indian shares in 2013
GOLD
MARKETS
Spot gold fell 0.5 % to $1,387.18 trading at $1,389.97 in Asia. Gold down 17 % in 2013 . Gold August at $1,389.30 vs. $1,387.50 on May 24. Silver declined 0.9 % to $22.4805, heading for a 4th monthly decline.
FACTORS
• USD Index up 0.1 %.
• Shanghai Gold Exchange: Cash Gold at a 2-week low of 10,094 kg yesterday.
• Hong Kong, delivery premiums down to $3 vs. $5 to $6 last week.
FOREIGN EXCHANGE
MARKETS
USD rose 0.9 % to 101.86 /JPY and rose 0.2 % to $1.2904 /EUR. JPY fell 0.7 % to 131.42 /EUR . USD Index rose 0.2 % to 83.889. Markets in the U.S. and U.K. were closed yesterday for public holidays.
FACTOR
• U.S. FORECAST: consumer sentiment up to 71 (May) vs. 68.1 in April (Nov. 2012 High)
• S&P/Case-Shiller index of property values in U.S. up 10.2 % March ( April 2006 High)
• BOJ deposits for financial companies will rise to a record 72.4 trillion yen ($711 Bln.)
• BoJ to buy 7 trillion yen of Gov.t bonds every month to end 15 years of deflation.
• FX OTC trading rose 30%, in May vs. previous month.

COPPER
MARKETS
Copper 3- months fell 1.1 % to $7,220 and was trading at $7,237 in Asia . Copper July fell 0.7 % to $3.2730 a pound. Copper September declined 1 % to $8,491 per ton.
FACTORS
• China GDP was 7.7 % in Q1 vs. 7.9 % in Q4 2012 , POBC target at 7.5 %.
• Copper up 2.6 % in May (1st gain in since January).
• McMoRan Copper & Gold Inc.'s Grasberg mine stopped mining after a tunnel collapse.
OIL
MARKETS
WTI July fell 92 cents to $93.23 ,was trading at $93.55 in Asia . Brent July rose 2 cents to $102.64. Brent at a premium of $9.09 to WTI. The spread was $8.85 yesterday.
FACTORS
• UAE said global demand will stay “relatively weak.”
• OPEC is forecast to keep its supply target unchanged on May 31.
• Current prices are “suitable and fair,” said Al Mazrouei, the U.A.E.'s energy minister.
• Global consumption about 800,000 barrels a day more than in 2012 : UAE Energy Minister.
• Crude at $100 a barrel is a “reasonable” price :Saudi Arabia’s Oil Minister Ali Al-Naimi
• Hedge funds long on Brent by 16,460 contracts in the week ended May 21.
• Longs vs. Shorts were more by 146,679 lots.

48

INDIAN INR
MARKETS
INR fell 0.2 % to 55.675 (Low of 56.0150 May 23). INR has declined 3.4 % in May. 1-month volatility, fell 15 BP. to 8.99 %. 3-month forwards at 56.50 Vs. 56.46 . 3-Month NDF at 56.56 Vs. 56.45.
FACTORS
• US: Forecast: consumer sentiment highest level since Nov.
• US: S&P/Case-Shiller Index property values in 20 cities rose most since April 2006
• RBI: Lenders cannot make loans using units of gold exchange-traded funds as collateral.
• RBI: May 13: Imports of Gold by banks on a consignment basis to only for exporters.
• Global funds bought a net $14.5 Bln. of Indian shares in 2013
GOLD
MARKETS
Spot gold fell 0.5 % to $1,387.18 trading at $1,389.97 in Asia. Gold down 17 % in 2013 . Gold August at $1,389.30 vs. $1,387.50 on May 24. Silver declined 0.9 % to $22.4805, heading for a 4th monthly decline.
FACTORS
• USD Index up 0.1 %.
• Shanghai Gold Exchange: Cash Gold at a 2-week low of 10,094 kg yesterday.
• Hong Kong, delivery premiums down to $3 vs. $5 to $6 last week.
FOREIGN EXCHANGE
MARKETS
USD rose 0.9 % to 101.86 /JPY and rose 0.2 % to $1.2904 /EUR. JPY fell 0.7 % to 131.42 /EUR . USD Index rose 0.2 % to 83.889. Markets in the U.S. and U.K. were closed yesterday for public holidays.
FACTOR
• U.S. FORECAST: consumer sentiment up to 71 (May) vs. 68.1 in April (Nov. 2012 High)
• S&P/Case-Shiller index of property values in U.S. up 10.2 % March ( April 2006 High)
• BOJ deposits for financial companies will rise to a record 72.4 trillion yen ($711 Bln.)
• BoJ to buy 7 trillion yen of Gov.t bonds every month to end 15 years of deflation.
• FX OTC trading rose 30%, in May vs. previous month.

COPPER
MARKETS
Copper 3- months fell 1.1 % to $7,220 and was trading at $7,237 in Asia . Copper July fell 0.7 % to $3.2730 a pound. Copper September declined 1 % to $8,491 per ton.
FACTORS
• China GDP was 7.7 % in Q1 vs. 7.9 % in Q4 2012 , POBC target at 7.5 %.
• Copper up 2.6 % in May (1st gain in since January).
• McMoRan Copper & Gold Inc.'s Grasberg mine stopped mining after a tunnel collapse.
OIL
MARKETS
WTI July fell 92 cents to $93.23 ,was trading at $93.55 in Asia . Brent July rose 2 cents to $102.64. Brent at a premium of $9.09 to WTI. The spread was $8.85 yesterday.
FACTORS
• UAE said global demand will stay “relatively weak.”
• OPEC is forecast to keep its supply target unchanged on May 31.
• Current prices are “suitable and fair,” said Al Mazrouei, the U.A.E.'s energy minister.
• Global consumption about 800,000 barrels a day more than in 2012 : UAE Energy Minister.
• Crude at $100 a barrel is a “reasonable” price :Saudi Arabia’s Oil Minister Ali Al-Naimi
• Hedge funds long on Brent by 16,460 contracts in the week ended May 21.
• Longs vs. Shorts were more by 146,679 lots.

49

INDIAN INR
MARKETS
INR weakened 0.3 % to 56.155 . It touched 56.1850 earlier, the weakest level since Aug. 3, and has dropped 4.2 % this month. 1-month volatility raised 2 BP and was at 8.80 %. 3-month forwards traded at 57.06 compared with 56.87 yesterday. USD Index , gained 0.7 % this week.
FACTORS
• Global funds investments in debt at a record of $38.5 Bln on May 21
• Current account deficit was at an all time high of 5 % of GDP (official estimates.)

GOLD
MARKETS
Gold climbed 0.7 % to $1,390.30 and was at $1,387 in Asian hours, down 6.1 % in May. Gold fell 1.5 % yesterday, touching $1,373.63. Gold August was up 0.5 % to $1,386. It is down 5.8 % in May for a second monthly decline. Silver was little changed at $22.36, 26 % lower this year.
FACTORS
• Assets in ETPs dropped 0.2 % to 2,154.2 MT yesterday.
• Shanghai Gold Exchange’s spot volumes rose to 15,641 kilograms.
FOREIGN EXCHANGE
MARKETS
USD Index, rose 0.3 % to 84.349. USD flat at $1.2845 /EUR after rising 0.6 % yesterday. The yen traded at 131.57 per euro from 131.59 and was little changed at 102.42 per USD. The Aussie fell 0.8 % to 95.40 U.S. cents, after dropping to 95.36, the weakest since Oct. 5, 2011.
FACTORS
• US: 1st Quarter GDP Tomorrow (ESTIMATE 2.5%)
• ESTIMATE: 2013 GDP GROWTH: U.S. - 2 %, Japan 1.4 %, Euro-Zone minus 0.6%
• CAD Falls to 1-Year Low on opinion that Fed will slow down QE3
• Swiss Franc Falls as Investors Pursue Risky Assets

COPPER
MARKETS
Copper fell, paring its first monthly gain in four months as Freeport-McMoRan Copper & Gold Inc. said it can start open-pit production at Indonesia’s Grasberg mine after an accident halted operations. Copper 3 Months fell 0.2 % to $7,306. Relative strength index 50.
FACTORS
• Asian stocks rose for a second day after improving U.S. Data
• China’s steel output rose by 20.09 million tons in the first 4 months of 2013
• Japan’s output of copper and copper- alloy fabricated products rose 2.9 % in April
OIL
MARKETS
WTI July at $94.77 down 24 cents,. The volume of all futures traded was 39 % below the 100-day average… Prices are up 1.4 % this month after a 3.9 % loss in April. Brent July down 16 cents at $104.07. Brent at a premium of $9.30 to WTI
FACTORS
• FORECAST: Crude supplies slid for a 3rd week, the longest run of declines this year. (750,000)
• OPEC will maintain its production quota at 30 million barrels a day.

50

INDIAN INR
MARKETS
INR rose for the first time in 3 days as some investors judged its decline to a 10-month low yesterday to be excessive. The INR strengthened 0.1 % to 56.1400. 1-month volatility, rose 1 BP , or 0.01 % point, to 8.99 %. 3-month forwards traded at 57.07 Vs. 57.14 . 3-Month NDF was at 57.02 vs.57.13.
FACTORS
• Technical: The 14-day RSI is 77.6, above the 70 threshold
• Global funds bought $14.8 Bln. of Stocks and $38.5 Bln of Debt (new high)
GOLD
MARKETS
Gold rose 0.4 % to $1,397.96 traded at $1,396.30 in Asia . Prices are down 5.4 % in May . Gold August rose 0.2 % to $1,394.90. Silver was little changed at $22.495, set for a fourth monthly drop.
FACTORS
• Assets in the SPDR Gold Trust, expanded yesterday for the first time since May 9,
• Holdings in ETP (June 2011 Low) fell 5.4 % in May.
• Shanghai Gold cash contract volume at 19,599 kg. from 15,641 kg on May 28.

FOREIGN EXCHANGE
MARKETS
USD was at 101.04 JPY having risen 3.7 % since the end of April. The JPY was little changed at 130.94 per EUR after earlier gaining as much as 0.4 %. EUR fell 0.1 % to $1.2959, /USD trimming its monthly slide to 1.6 %. USD Index slid 0.2 % to 83.519.
FACTORS
• JP Morgan Chase & Co.'s G-7 Volatility Index, rose to 10.14 %, (Feb. 27 high).
• Japanese investors sold a net of $11 Bln of foreign bonds in the week ended May 24.
• JPY 10-year bond yields at a 1-year high of 1 % last week from 0.55 % on April 3.
• Central bank will increase currency sales to combat a “significantly over-valued” NZD.
• CAD Advances as central bank signals rate hikes, but leaves rates unchanged.
• EU Warns of ‘Huge’ Uncertainty If CFTC Won’t Delay Swaps Rule.
• AUD gains as building approvals grew more than estimated.

COPPER
MARKETS
3-Month Copper dropped 0.5 % to $7,226. Relative strength index at 47.
FACTORS
• Copper stockpiles rising to a 10 year high.
• Steel Rebar futures traded near the lowest level in 8 months.
• Freeport-McMoRan has restarted some operations at its Grasberg Mine in Indonesia .
OIL
MARKETS
WTI July at $93.09 down 4 cents, . The volume of all futures traded was 42 % below the 100-day average. WTI July fell $1.88 to $93.13 yesterday, the lowest close since May 1. Brent July up 26 cents at $102.69. Brent at a premium of $9.60 to WTI.
FACTORS
• U.S. stockpiles rose the most in a month (4.4 million Barrels May-24 week).
• “Oil may stay around $100 in the short-term”, Karim Djoudi, the Algerian finance minister.

51

INDIAN INR
MARKETS
INR little changed at 56.4950. 1-month volatility rises 19 bps to 9.4175%; this year’s average 9.0131%. NDF 1-month up 0.3% to 56.85, 12-month rose 0.3% to 59.91. 10 Year Benchmark at 7.242%. Overnight Inter-bank raised 70 BP to 7.30%
FACTORS
• Technical: Support at 56.7112, 56.9175, 57.2813; resistance at 56.3474, 56.1899, 55.8261. USD’s 14-day is at 81.5, above overbought threshold. USD/INR upper Bollinger band is at 56.7529.
• RBI to clarify licensing for new banks on June 3.
• Standard Chartered Bank cuts FY14 GDP growth to 5.5% from 6.0%.

GOLD
MARKETS
Gold gained 0.7 % to $1,397.88 and was trading at $1,395.60 in Asia. Prices fell 6 % last month, including a 1.9 % decline on May 31. Gold August was flat at $1,394.30. Silver climbed 1.1 % to reach $22.395.
FACTORS
• Assets in the SPDR Gold Trust, unchanged for a 2nd day on May 31.
• USD Index, dropped 0.2 %.
• Funds raised their net- longs by 35 % to 48,096 Contracts Week of May 28.
• Assets in silver-backed ETPs fell by 2.4 % in May, (2 years high)

FOREIGN EXCHANGE
MARKETS
The euro flat at $1.3012 . It fell 1.3 % in May . Euro gained 0.2 % to 130.87 yen. The USD added 0.1 % to 100.58 yen. AUD advanced 0.6 % to 96.28 U.S. cents, after dropping to 95.28 on May 29, the lowest since October 2011.
FACTORS
• EU Manufacturing contracted for a 22nd month
• Opinion: ECB will hold its interest rate at a record low of 0.5 % .
• FORECAST: EU PMI at 47.8 in May.
• China’s non-manufacturing PMI was at 54.3 in May from 54.5 (April).
• Yen shorts increase to 99,769, versus 95,186 a week earlier.
• Draghi Sees Signs of Stabilization in ‘Challenging’ Economy.
• ECB’s Coeure Says BOJ Policy Not Yet Negative for Global Economy.

COPPER
MARKETS
Copper 3 months gained up 1 % to $7,380 . Prices advanced in May for the first time in four months, gaining 3.6 %. Copper July rose 1.2 % to $3.3315 a pound
FACTORS
• China President Xi Jinping said expansion is on a “more stable footing,”.
• China PMI at 50.8 in May from 50.6 in April, after a separate gauge last week signaled a contraction.
• China’s State Reserve Bureau bought about 30,000 tons of nickel, 1/6th of stocks in LME.
• Copper stocks fell to 608,450 tons on May 31.

OIL
MARKETS
Brent, fell 0.6 % to $99.75 , before rising again to 100. Brent July at $100.32 down 7 cents. Prices slid 2.2 % last week and 1.9 % in May. WTI July at $91.94 down 3 cents. Prices dropped 2.3 % last week and 1.6 % in May. Brent was at a premium of $8.38 to WTI .
FACTORS
• OPEC kept its production target unchanged( 30 million barrels a day).
• US: Stocks rose to 398 million barrels in the week ended May 24, the most since 1931.
• U.S. crude output rose 34,000 barrels to 7.29 million a day in the week ended May 24.
• Hedge fund cut longs on Crude by 6.2 % (May 28).

52

INDIAN INR

MARKETS

INR rose 0.1 % to 56.3590 . It advanced 0.6 % yesterday, the biggest gain since April 30. 1-month volatility fell 11 bp to 8.85 %. 3-month forwards at 57.32 Vs. 57.31. 3- Month NDF were at 57.26 vs. 57.32.

FACTORS

RBI curbs on gold imports, (Gold is 80 % of the nation's current-account deficit.)
Fed Dallas President Fisher  called for a reduction in the Fed's $85 Bln.QE3  
USD index declined.

GOLD

MARKETS

Gold rose 0.6 % to $1,408.20 and was at $1,407.30 in Asia . Prices fell 0.9 % yesterday. Gold August was up 0.6 % to $1,406. It had fallen 1 % yesterday. Cash silver advanced 0.3 % at $22.62 . Gold dropped 16 % in 2013.

FACTORS

Assets in the SPDR Gold Trust fell to 1,010.45 MT down  for the first time in a week.
India, the world's biggest consumer, widened curbs on imports.

FOREIGN EXCHANGE

MARKETS

USD was flat at 99.84 JPY . It had risen 0.5 % yesterday. The euro flat at $1.3087 from $1.3081. EUR lost 0.1 % to trade at 130.66 vs. the JPY. The USD Index, was flat at 82.708. 3-month volatility of the G7 even currencies was near the highest in more than 3 months. The measure was at 10.12 % after touching 10.24 % yesterday, the highest since Feb. 26.

FACTORS

 Kansas Fed President Esther urged a reduction in the QE3
JAPAN: Prime Minister Shinzo Abe vowed that his nation will end deflation with policies.
FORECAST:  U.S. Jobs rose by 46,000 jobs to 165,000 in May vs. April
 USD Set to Rise 10% as Deutsche Bank Cites Yield
AUSTRALIA: Central bank rate at 2.75% (lowest ever) hints at rate cuts
CAD Declines as Wider Trade Deficit Undercuts Growth
US Trade deficit up 8.5 % to $40.3 Bln. from $37.1 Bln in March
UK: Increase in  PMI of construction, retail sales also improved.

COPPER

MARKETS

Copper 3 months fell 0.6 % to $7,410. Copper July lost 0.2 % at $3.3615 a pound. Copper October up 0.4 % to $8,697 a ton.

FACTORS

 Freeport's output in Indonesia is shut for a government probe.
 Closing the mine for the entire period would remove about 140,000 tons of supply.

OIL

MARKETS

WTI July delivery was up 67 cents to $93.98. The volume of all futures traded was 39 % below the 100-day average. Prices slid 14 cents to $93.31 yesterday. Brent July was up 25 cents, , to $103.49. Brent at a premium of $9.60 to WTI.

FACTORS

53

INDIAN INR
MARKETS
INR fell 0.8 % to 57.525 . It is the biggest drop since May 10. It touched 57.82, surpassing the previous record low of 57.3275 set in June 2012. 1-month volatility, up 13 basis points, to 9.16 %. 3-month forwards slid 0.4 % to 58.17 , 3-Month NDF down 0.6 % to 58.56.
FACTORS
• US employers took on 175,000 workers in May, more than the 163,000 forecast.
• Fed’s . Bernanke, said that "Fed “could” scale back stimulus efforts if the employment outlook shows “sustainable improvement.”

GOLD
MARKETS
Spot gold advanced as much as 0.4 % to $1,388.41 before trading at $1,386.04 in Asia. Silver traded 0.5 % up at $21.7715 after declining 4.4 % on June 7, the biggest drop at close since April 15.
FACTORS
• China’s IIP at 9.2 % in May from a year earlier and factory-gate prices fell for a 15th month.
• China Export were at a 10-month low and imports dropped.
• Alan Greenspan, a former Fed chairman, said “Fed needs to begin cutting back on QE3”
• Funds net-long position on gold up by 19 % to 57,113
• Gold ETFs fell 1.3 MT to 2,135.866 MT ( May 2011 low)

FOREIGN EXCHANGE
MARKETS
The USD resumed its bounce against the JPY in early Asian trade on Monday, moving well away from a 2-month low in the previous session, while the AUD fell after data from China. USD rose to 98.28 JPY, 3.5 % higher than a trough of 94.98 hit during volatile trade on Friday
FACTORS
• JPY at 90 Seen by Options Losing Confidence in Abe
• USD Rises Versus JPY on Fed Opinion
• Chancellor Merkel said euro nations tighten budgets and reshape the labor markets.
• U.K. Recovery : BDO gauge of company output expectations up to 94.4, ( June 2012, High)

COPPER
MARKETS
Copper 3- months fell 1.2 % to $7,146 (May 16 Low) , and was trading at $7,182.25 in Asia . Prices lost 1.1 % last week. Copper July slid 0.7 % to $3.2440 per pound.
FACTORS
• China’s trade and industrial production trailed estimates
• China’s industrial output rose a less-than-forecast 9.2 % in May
• U S jobs grew 175,000 in May, beating the 163,000 forecast
• China car sales were up by 9 % (1.4 million) Vs. 13 % in April and 13.3 % in March.
• Copper imports by China were at 358.672 MT vs. 295,799 MT in April and 419,741 MT a year ago.

OIL
MARKETS
WTI July at $96.08 a barrel, up 5 cents. The volume of all futures traded was 7 % above the 100-day average. Brent July fell 3 cents to $104.53 . Brent was at a premium of $8.45 to WTI.
FACTORS
• Sudan threatened to halt exports of South Sudan’s oil.
• China’s crude imports rose to a four-month high in May ( 5.64 million barrels a day).
• China: Oil refining dropped 1.4 % from April to 9.24 million barrels a day,
• Net-long positions dropped by 5,404 or 2.5 %, to 212,127,
• Japan GDP expanded an annualized 4.1 %, vs. 3.5 %, estimated .

54

INDIAN INR
MARKETS
INR was 0.4 % weaker at 58.3950 , having earlier touched an all-time low of 58.4175. 1-month volatility, rose 40 basis points, to 10.59 %. 3-month forwards slid 0.8 % to 59.34. 3-month NDF dropped 1 % to 59.47.
FACTORS
• INR dropped to a record low on opinion that Fed will pare debt purchases
• Investors redeemed more than $6 Bln from high-yield bond funds worldwide (this week )
• JPMorgan Asia USD Index, (USD Vs. 10 currencies) fell to a to a 9 month low .

GOLD
MARKETS
Gold traded near a 2-week low. Gold was at $1,384.15 after declining 0.2 % to $1,383.15. Prices fell to $1,375.95 yesterday, the lowest level since May 28. Gold August future lost 0.2 % to $1,383.30. Silver lost 0.2 % to $21.8875 .
FACTORS
• US: S&P AA+ credit rating outlook to stable from negative, citing receding fiscal risks.
• Assets in the SPDR Gold Trust, rose for the 1st t time since May 29.
• FORECAST: . Fed reduce QE3 to $65 Bln (October FOMC) from $85 Bln.
• Newcrest Mining, Australia’s largest gold producer, to write down $5.7 Bln

FOREIGN EXCHANGE
MARKETS
The yen strengthened 0.6 % to 97.17 vs. yesterday, when it fell 1.2 %. It gained 0.5 % to 130.29 per euro. EUR rose 0.1 % to $1.3270.
FACTORS
• BOJ refrained from extending the maturity of loans to banks.
• AUSTRALIA: Home-loan approvals expanded by less than forecast.
• BOJ kept unchanged its plan for a $611 Bln annual increase in money supply
• CAD Rises as Housing Increases More Than Forecast
• U.K. borrowing costs are the highest in more than 3 months as for $9.3 Bln of Gilt sales

COPPER
MARKETS
Copper 3 months rose 0.9 % to $7,223.25. The price touched $7,126.50 yesterday. Copper July little changed at $3.2415 a pound.
FACTORS
• Freeport-McMoRan Copper & Gold Inc.'s Grasberg mine will cut output.
• China’s imports of unwrought copper and copper products in May up 21 % from April

OIL
MARKETS
WTI July at $95.67 down 10 cents. . The volume of all futures traded was 73 % below the 100-day average. The contract fell 26 cents yesterday to $95.77, the lowest close since June 6. Brent July fell 23 cents to $103.72. Brent was at premium of $8.04 to WTI
FACTORS
• FORECAST: U.S. stockpiles increased while refinery rates rose for a 2nd week.
• FORECAST U.S. crude inventories rose by 550,000 barrels last week.
• Refinery utilization rates climbed 0.3 % 88.7 %, (Highest since Jan. 4)
• Global oil and gas from shale are greater than previously estimated( EIA ).
• Shale gas estimates increased by 10 % to 7,299 trillion cubic feet.
• Reserves of tight oil, may be 345 Bln barrels (EIA)

55

INDIAN INR

MARKETS

INR appreciated 0.1 % to 58.3550. 1-month volatility, fell 5 basis points to 11.56%. 3-month forwards rose 0.4 % today to 59.31. 3-month NDF gained 0.3% to 59.32.

FACTORS

Government said it is considering  an overseas bond sale to spur capital inflows.
USD sales by RBI and allowing more foreign investment in the debt market are other measures

GOLD

MARKETS

Gold was little changed at $1,377.39. Prices touched $1,366.19 yesterday, the lowest since May 23. Gold August was little changed at $1,376.60 . Silver spot climbed 0.7 % to $21.8085.

FACTORS

Goldman Sachs : 12-month forecast at $1,345. 
Holdings in ETF  have lost 19.2 % this year, reaching 2,127.5 MT  yesterday (April 2011 low ).

FOREIGN EXCHANGE

MARKETS

EUR was flat at $1.3308 after touching $1.3318 yesterday, the strongest since Feb. 25. The EUR gained 0.3 % to 128.28 yen, after falling 2.4 % yesterday. The USD rose 0.4 % to 96.40 yen.

FACTORS

EURO- ZONE short-term rates reached a four-month high, 2Y Swap at 0.32% vs. 0.05% April
AUD rebounded from a 3 years low as consumer confidence rose.
EURO ZONE : The rising rates show expectations of a  rate cut by the ECB have receded.
US:  FORECAST: Retail sales up .4 % in May vs.  0.1 % gain in April.
US: 10 Y at 2.29% (Year High)

COPPER

MARKETS

Copper 3- months traded between $7,087 and $7,020, and was little changed at $7,056.75 in Asian hours. Copper July fell 0.3 % to $3.1865 a pound.

FACTORS

Opinion: Central banks will refrain from adding more stimuli to boost global growth.
Freeport-McMoRan Copper & Gold Inc. rescheduled concentrate shipments to its customers.

OIL

MARKETS

WTI July fell 91 cents to $94.47. The volume of all futures traded was 40 % below the 100-day average. It fell 39 cents, to $95.38 yesterday, the lowest since June 6. Brent July fell 59 cents to $102.37. Brent was at a premium of $7.88 to WTI .

FACTORS

U.S. crude stockpiles increased the most in more than four years.
OPEC: Demand forecast for 2013 unchanged, due to risks to the global economy.
OPEC:  Global oil demand up by 780,000 barrels/day, to 89.7 million (up 0.9%)
56

INDIAN INR

MARKETS

The INR depreciated 0.6 % to 58.1325 . It touched an all-time low of 58.9850 on June 11. 1-month volatility, fell 8 basis points to 11.30 %. 3-month forwards fell 0.1 % to 58.78 . 3-month NDF fell 0.5 % to 59.15.

FACTORS

World Bank cut growth forecasts and on concern that  central banks will pare stimulus.
World Bank: Global economy will expand 2.2 % in 2013 Vs. forecast of 2.4 %.
Market Buzz: RBI intervened June 11-12 to prevent the INR falling to 60
Long-term investors  can buy $5 billion more Indian sovereign debt
The limit on debt purchases is now  $30 billion, vs. $25 billion earlier.
FM  Chidambaram:  Press Conference today on the INR weakness
Fitch Ratings revised India's credit-rating outlook to stable from negative .
FOMC meets next week after the BoJ this week left its lending program unchanged.

GOLD

MARKETS

Gold was flat at $1,388.84 after rising 0.5 % and declining 0.3 %. Gold August down 0.3 % to $1,388.20. Silver spot flat at $21.8175.

FACTORS

USD fell to a 4-month low.
World Bank: US GDP 2 % up 2013 vs. Forecast of 1.9 %.
USD Index fell 0.4 % to the lowest since February.

FOREIGN EXCHANGE

MARKETS

The JPY surged 1.4 % to 94.69 after rising to 94.45, the strongest since April 4. Its 4.3 %, 3-day advance is set to be the biggest since May 2010. USDJPY 1-month volatility touched 18.2 %. JPY gained 1.3 % to 126.48 per EUR . EUR rose 0.1 % to $1.3355 after reaching $1.3370, the highest since Feb. 20. The USD Index fell to the lowest in 4 months . It fell 0.3 % to 80.733, after dropping to 80.651,( Feb. 20 Low). It lost 0.9 % over the previous 3 sessions.

FACTORS

Japanese investors were net sellers of overseas bonds and stocks for a 4th- week.
USD volatility against the JPY was at a 2 year high.
NZD fell after the central bank signaled the currency remains overvalued.
 Japanese sold $4.1 billion of foreign debt and a net 221.8 billion JPY of equities
JPY 10-year yields rose from 0.315 % to 1 % .
 Japan's Topix index of shares tumbled 3.8 %. (Fallen 17% since May 22)
US Forecast: Retail Sales up 0.4 % in May, the best in 3 months
US Forecast:  Jobless benefits rose 26,000 to 2.98 million in the week ended June 1.
U.K. Inflation Expectations Risk Becoming Dislodged, BOE Says

COPPER

MARKETS

Copper 3 months rose 1 % to $7,190. The price touched $7,020 yesterday, the lowest since May 3. Copper July was flat at $3.227 a pound. Copper October retreated 2.3 % to $8,447 a ton .

FACTORS

Freeport-McMoRan Copper & Gold Inc. declared force majeure on shipments
Grasberg is reducing output by 1,361 tons of copper  and 3,000 ounces of gold a day.
This is equal to 2.9 % of average daily global copper output this year.

OIL

MARKETS

WTI July fell 62 cents to $95.26. The volume of all futures traded was 34 % below the 100-day average. WTI was up 50 cents to $95.88 yesterday. Brent July which expires today, fell 38 cents, or 0.4 %, to $103.11. Brent August was down 45 cents at $103.11. Brent was at a premium of $7.82 to WTI.

FACTORS

World Bank cut its forecast for global economic growth.
U.S. crude stockpiles rose last week, government data showed.
Protesters returned to Istanbul's Taksim Square
Libya said sabotage has cut its crude output. (Production declined to 1m from 1.6m barrels)
OPEC will need to supply  29.8 million barrels a day:  IEA (Reduction by 20,000 )
OPEC would need to cut output by 1.1 million barrels from the 30.9 million output May.
57

INDIAN INR

MARKETS

The INR depreciated 0.6 % to 58.1325 . It touched an all-time low of 58.9850 on June 11. 1-month volatility, fell 8 basis points to 11.30 %. 3-month forwards fell 0.1 % to 58.78 . 3-month NDF fell 0.5 % to 59.15.

FACTORS

World Bank cut growth forecasts and on concern that  central banks will pare stimulus.
World Bank: Global economy will expand 2.2 % in 2013 Vs. forecast of 2.4 %.
Market Buzz: RBI intervened June 11-12 to prevent the INR falling to 60
Long-term investors  can buy $5 billion more Indian sovereign debt
The limit on debt purchases is now  $30 billion, vs. $25 billion earlier.
FM  Chidambaram:  Press Conference today on the INR weakness
Fitch Ratings revised India's credit-rating outlook to stable from negative .
FOMC meets next week after the BoJ this week left its lending program unchanged.

GOLD

MARKETS

Gold was flat at $1,388.84 after rising 0.5 % and declining 0.3 %. Gold August down 0.3 % to $1,388.20. Silver spot flat at $21.8175.

FACTORS

USD fell to a 4-month low.
World Bank: US GDP 2 % up 2013 vs. Forecast of 1.9 %.
USD Index fell 0.4 % to the lowest since February.

FOREIGN EXCHANGE

MARKETS

The JPY surged 1.4 % to 94.69 after rising to 94.45, the strongest since April 4. Its 4.3 %, 3-day advance is set to be the biggest since May 2010. USDJPY 1-month volatility touched 18.2 %. JPY gained 1.3 % to 126.48 per EUR . EUR rose 0.1 % to $1.3355 after reaching $1.3370, the highest since Feb. 20. The USD Index fell to the lowest in 4 months . It fell 0.3 % to 80.733, after dropping to 80.651,( Feb. 20 Low). It lost 0.9 % over the previous 3 sessions.

FACTORS

Japanese investors were net sellers of overseas bonds and stocks for a 4th- week.
USD volatility against the JPY was at a 2 year high.
NZD fell after the central bank signaled the currency remains overvalued.
 Japanese sold $4.1 billion of foreign debt and a net 221.8 billion JPY of equities
JPY 10-year yields rose from 0.315 % to 1 % .
 Japan's Topix index of shares tumbled 3.8 %. (Fallen 17% since May 22)
US Forecast: Retail Sales up 0.4 % in May, the best in 3 months
US Forecast:  Jobless benefits rose 26,000 to 2.98 million in the week ended June 1.
U.K. Inflation Expectations Risk Becoming Dislodged, BOE Says

COPPER

MARKETS

Copper 3 months rose 1 % to $7,190. The price touched $7,020 yesterday, the lowest since May 3. Copper July was flat at $3.227 a pound. Copper October retreated 2.3 % to $8,447 a ton .

FACTORS

Freeport-McMoRan Copper & Gold Inc. declared force majeure on shipments
Grasberg is reducing output by 1,361 tons of copper  and 3,000 ounces of gold a day.
This is equal to 2.9 % of average daily global copper output this year.

OIL

MARKETS

WTI July fell 62 cents to $95.26. The volume of all futures traded was 34 % below the 100-day average. WTI was up 50 cents to $95.88 yesterday. Brent July which expires today, fell 38 cents, or 0.4 %, to $103.11. Brent August was down 45 cents at $103.11. Brent was at a premium of $7.82 to WTI.

FACTORS

World Bank cut its forecast for global economic growth.
U.S. crude stockpiles rose last week, government data showed.
Protesters returned to Istanbul's Taksim Square
Libya said sabotage has cut its crude output. (Production declined to 1m from 1.6m barrels)
OPEC will need to supply  29.8 million barrels a day:  IEA (Reduction by 20,000 )
OPEC would need to cut output by 1.1 million barrels from the 30.9 million output May.
58

INDIAN INR

MARKETS

INR slid 0.5 % to 57.8200 .That’s the biggest drop since June 10. 1-month volatility, rose 9 basis points to 10.99 %. 3-month forwards fell 0.5 % to 58.72. 3-month NDF fell 0.2 % to 58.74.

FACTORS

USD-INR   14-day relative strength index at 68, Near 70 ( INR oversold)
Opinion: Fed will signal a reduction in asset purchases.
US: FOMC starts a 2-day meeting tomorrow.
Inflation was at 4.7 % in May from a year earlier.
No changes in RBI Mid Term Review

GOLD

MARKETS

Gold was at $1,391.65 vs. $1,390.74 on June 14, when it rose 0.3 %. Gold for August up 0.2 % to $1,390.80, climbing for a 2nd day. Cash silver retreated 0.3 % to $22.0355.

FACTORS

U.S. government report :Wholesale prices climbed in May for the first time in 3 months
Holdings in ETF  dropped to 2,116.834 MT on June 14. (March 2011 Low)
Funds lowered their longs by 4.1 % to 54,779.

FOREIGN EXCHANGE

MARKETS

The euro added 0.4 % to 126.09 yen after posting a 2.6 % slump last week. EUR-USD slid 0.1 % to $1.3329. The yen weakened 0.3 % to 94.60 per USD following a 3.5 % weekly advance. The USD Index, added 0.1 % to 80.737 after falling 1.2 % last week.

FACTORS

EURO-ZONE :  trade balance due today as inflows have supported  the EURO
Funds cut Shorts on the EURO at a record pace in the past 2 weeks.
The longs were more than shorts on the EURO by 77,111
Euro-area trade surplus at  $25 B in March (  1999 High - 1.7% of GDP)
US Trade deficit is at 2.8 % of GDP, Japan Trade surplus is at 1% of GDP.
EUR was up 3.6 % in 2013, the best performer among 10 majors.
JP Morgan FX Volatility Index at a 1-year high of 11.43 % Vs. 7.05 % in Dec.

COPPER

MARKETS

Copper 3 months rose 1.2 % to $7,176 MT was trading at $7,136.50 in Asian hours. Copper October was up 0.4 % to $8,435 per MT, and Copper July was up 0.6 % to $3.22 per pound.

FACTORS

Aluminum rose after falling for 3 months on a revival in U.S. manufacturing.
US: Factory output climbed 0.1 % after falling 0.4 % in April and 0.3 % in March
Funds increased Shorts by 18,722 contracts in June 11 from 6,626 a week earlier.

OIL

MARKETS

WTI July was at $97., down 25 cents. The volume of all futures traded was 18 % below the 100-day average. WTI rose 1.2 % to $97.85 on June 14. Brent August was down 17 cents to $105.76. Brent at a premium of $7.96 to WTI

FACTORS

Unrest in Syria will spread to other parts of the Middle East and disrupt supplies.
U.S. President Barack Obama was said to authorize arming Syrian rebel groups.
U.K.  plans to give non-lethal support to the Syrian opposition,
President-elect H Rohani's vow to improve ties with the world : 1st -round election win.
Funds net-long up by 9.5 % in the week ended June 11.
59

INDIAN INR

MARKETS

INR drops for 2nd day, falling 0.8% to 58.3350 . 1-month volatility rises 19 bps to 10.8075%, this

year’s average is 9.1221%. 1-month NDF slips 1% to 58.69; 12-month NDF declines 1% to 61.70. INR has fallen 2.4% this month to 57.8662 through yesterday. Overnight call rate at 7.300%

FACTORS

Technical: Support at 57.9917, 58.1171; next support at 58.4646; pivot point at 57.7696; resistance at 57.6442, 57.4221, 57.0746  USD/INR 14-day RSI is around 72, above overbought threshold
Markets expects further 75 bps of repo rate cut  in 2013.
Global funds sold $545.4 m of debt on June 14, most since Oct. 28, 2010.

GOLD

MARKETS

Gold traded at $1,384.40 vs. $1,385.35 yesterday, when it fell 0.4 %. Gold August was little changed at $1,382.50 .Gold is 17 % lower this year. Cash silver rose 0.2 % to $21.919 .

FACTORS

Holdings in the SPDR Gold Trust dropped to 1,003.17 MT yesterday
US:  Home builders Confidence surged in June to the highest level in 7 years.

FOREIGN EXCHANGE

MARKETS

The JPY fell 0.4 % to 94.85 per USD after losing 0.2 % yesterday. It slid 0.3 % to 126.70 per EUR. EUR was at $1.3356 after reaching $1.3390 on June 13, the strongest since Feb. 20.

FACTORS

BoJ  its current-account balance will rise to a record with the  stimulus.
German data forecast to show investor confidence advanced.
US FORECAST:  CPI rose 0.2 % in May vs. a fall of 0.4 % in April (December 2008 High)
US FORECAST: Housing climbed 11.4 % in May vs. April to a 950,000 annualized rate.
JPMorgan FX Volatility Index fell to 10.26 % after a 1-year high of 11.43 % on June 13.
BoJ : QE Doubled  to $74 B  to achieve 2 % inflation in 2 years.

COPPER

MARKETS

Copper 3 months fell 0.5 % to $7,047.50 was trading at $7,068.25 in Asia . Copper September lost 0.4 % to $3.1970 a pound. Copper October declined 1.2 % to $8,336 a ton.

FACTORS

U.S. Federal Reserve may scale back stimulus measures.
 New home prices in China gained in 69 cities out of 70 cities

OIL

MARKETS

WTI July was at $97.78. . The volume of all futures traded was 40 % below the 100-day average. The contract rose 1.2 % to $97.85 on June 14, the highest close since Jan. 30. Brent August gained 7 cents to $105.54. The contract yesterday dropped 46 cents to $105.47. Brent at a premium of $7.53 to WTI

FACTORS

FORECAST: Crude supplies probably fell by 500,000 barrels last week.
 Syrian President Bashar warned Europe will "pay the price" for arming rebels .
FORECAST:  Refineries operated at 88 % of capacity, up 0.5 % from the prior week.
60

INDIAN INR

MARKETS

INR drops for 2nd day, falling 0.8% to 58.3350 . 1-month volatility rises 19 bps to 10.8075%, this

year’s average is 9.1221%. 1-month NDF slips 1% to 58.69; 12-month NDF declines 1% to 61.70. INR has fallen 2.4% this month to 57.8662 through yesterday. Overnight call rate at 7.300%

FACTORS

Technical: Support at 57.9917, 58.1171; next support at 58.4646; pivot point at 57.7696; resistance at 57.6442, 57.4221, 57.0746  USD/INR 14-day RSI is around 72, above overbought threshold
Markets expects further 75 bps of repo rate cut  in 2013.
Global funds sold $545.4 m of debt on June 14, most since Oct. 28, 2010.

GOLD

MARKETS

Gold traded at $1,384.40 vs. $1,385.35 yesterday, when it fell 0.4 %. Gold August was little changed at $1,382.50 .Gold is 17 % lower this year. Cash silver rose 0.2 % to $21.919 .

FACTORS

Holdings in the SPDR Gold Trust dropped to 1,003.17 MT yesterday
US:  Home builders Confidence surged in June to the highest level in 7 years.

FOREIGN EXCHANGE

MARKETS

The JPY fell 0.4 % to 94.85 per USD after losing 0.2 % yesterday. It slid 0.3 % to 126.70 per EUR. EUR was at $1.3356 after reaching $1.3390 on June 13, the strongest since Feb. 20.

FACTORS

BoJ  its current-account balance will rise to a record with the  stimulus.
German data forecast to show investor confidence advanced.
US FORECAST:  CPI rose 0.2 % in May vs. a fall of 0.4 % in April (December 2008 High)
US FORECAST: Housing climbed 11.4 % in May vs. April to a 950,000 annualized rate.
JPMorgan FX Volatility Index fell to 10.26 % after a 1-year high of 11.43 % on June 13.
BoJ : QE Doubled  to $74 B  to achieve 2 % inflation in 2 years.

COPPER

MARKETS

Copper 3 months fell 0.5 % to $7,047.50 was trading at $7,068.25 in Asia . Copper September lost 0.4 % to $3.1970 a pound. Copper October declined 1.2 % to $8,336 a ton.

FACTORS

U.S. Federal Reserve may scale back stimulus measures.
 New home prices in China gained in 69 cities out of 70 cities

OIL

MARKETS

WTI July was at $97.78. . The volume of all futures traded was 40 % below the 100-day average. The contract rose 1.2 % to $97.85 on June 14, the highest close since Jan. 30. Brent August gained 7 cents to $105.54. The contract yesterday dropped 46 cents to $105.47. Brent at a premium of $7.53 to WTI

FACTORS

FORECAST: Crude supplies probably fell by 500,000 barrels last week.
 Syrian President Bashar warned Europe will "pay the price" for arming rebels .
FORECAST:  Refineries operated at 88 % of capacity, up 0.5 % from the prior week.
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INDIAN INR
MARKETS
INR fell 1.9 % to 59.86 . It dropped to an unprecedented 59.9275 earlier, past the previous all-time low of 58.9850 touched on June 11. 1-month volatility rose 88 basis points to an 11-month high of 12.24 %. 3-month forwards flat at 59.67 . 3-Month NDF contracts fell 2 % to 61.03.
FACTORS
• Fed signaled it is prepared to start phasing out its stimulus program.
• Fed will taper QE3 later in 2013 and halt purchases around mid-2014
• Global funds have pulled $3.3 billion from debt this month and $324 million stocks.
• India will auction $7 billion of sovereign debt-purchase permits to foreign investors today.
GOLD
MARKETS
Spot gold fell 0.9 % to $1,339.55 (May 20 low) , and was at $1,347.43 in Asia . Gold August fell as 2.6 % to $1,338.60 (May 20 low) . It had ended up 0.5 % yesterday. Cash silver fell as much as 1.1 % to $21.17 (May 20 low)
FACTORS
• Holdings in the SPDR Gold Trust, dropped below 1,000 MT 1st time in 4 years.
• Gold slumped 20 % this year amid opinion that the Fed will pare its QE3
• SPDR assets have slumped 351.3 reducing $30 billion from the fund’s value.

FOREIGN EXCHANGE
MARKETS
USD rose 0.6 % to 97.12 yen, after advancing to 97.18, the highest since June 11. USD gained 0.3 % to $1.3256 per euro following a 0.7 % advance. Japan’s currency declined 0.4 % to 128.77 per euro. USD Index gained as much as 0.2 % to 81.607( June 11 High)
FACTORS
• US: FORECAST: Sales of owned houses up 0.6 % (MoM) to a 5 million rate in May (Nov 09 High)
• US: Fed Philadelphia’s “economic index” is estimated at - 2 in Junevs. -5.2 May
• US: Fed “downside risks to the outlook for the economy and the labor market have diminished”
• US: Fed : Outlook -GDP at 3.5 % and unemployment at 6.5 %.
• US: Fed inflation targeting at 1.05 %.
• JAPAN: Sold overseas debt for 5th week, worth $4.17 billion
• CHINA: PMI at 48.3 in June Vs 49.1 (FORECAST ) - Contraction
• Funds sell $19 billion of emerging market assets in 3 weeks.

COPPER
MARKETS
Copper 3 months fell 1.3 % to $6,870.50 ( May 2nd Low) . Copper September was down 1.3 % to $3.111 per pound.
FACTORS
• CHINA: The preliminary reading of 48.3 PMI

OIL
MARKETS
WTI July delivery, which expires today, declined as much as $1.78 to $96.46. The volume of all futures traded was 87 % above the 100-day average. Prices decreased 20 cents to $98.24 yesterday. WTI august was down $1.82 at $96.66. Brent August fell $1.68, or 1.6 %, to $104.44 . Brent was at a premium of $7.84 to WTI.
FACTORS
• U.S. stockpiles unexpectedly increased
• U.S. gasoline inventories climbed by 183,000 barrels in the week ended June 14
• China is the world’s 2nd oil consumer, accounting for 11 % of global demand in 2012.