The base metal complex traded mostly lower for the entire day as the dollar index strengthened against the majors, while equities traded mixed. Moreover the spate of data releases in the evening hold the market concerns during the day. Dollar index marching higher withdraws the safe haven image from the currency denominated commodities and divert the investment holding pattern to less riskier assets like dollar itself

The dollar index, a performance track of basket majors, traded mostly higher for the day, settling at 80.225, +0.74%, after making an intraday high of 80.442. Euro and Pound were pressurized by the Greece move to resort to IMF for financial aid rather than asking European nations to support Among the data release, the US current account deficit increased to $115.6 billion or 3.2% of GDP in the 4Q-2009, up from $102.3 billion in the 3Q, or 2.9% of GDP. For the year 2009, the deficit decreased to $419.9 billion or 2.9% of GDP, down from $706.1 billion or 4.9% of GDP in 2008

OUTLOOK

Nickel was an exception to the bearishness in the market due to the interruption in BHP Billion mines on penultimate day because of a temporary shortage of hydrogen. Day ahead, the factor might bring in some more upside in the silvery white metal mostly used in making steel

Day ahead, the market do not expect any major data releases from the US, and Euro-zone. However, Germany is due to release its Producers Price Index for February month, expected at 0.10% as compares to 0.80% on the previous month

Equities trade in mixed ranges in Asian hours after the US equity markets closed almost flat to higher. The weekend trades in equity would mirror similar trend in the commodity market as well

The dollar index opened at 80.290, nearing to its previous days close and moves up by 0.04%. At the time of writing the report, Japanese Yen and Euro appreciating might limit upside in Dollar while other majors wading low would support the uptrend

Consolidating the view we suggest base metals open on a regular note and trade mostly mixed for the day. The electronic session at LME is running mostly flat as of now, unable to judge the direction ahead. Moving on, any further upside in dollar index and weakness in the equity market would keep the metal prices checked for the day, while the weekend trade might attract some liquidation in holdings

Courtesy: Karvy Commtrade Ltd.

Get a bigger political picture to help you invest

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook