7 December 2015


With the conclusion of major events last week, the focus now shifts back to macro-economic figures from the US this week. The FED chair Janet Yellen in a testimony to the JEC said that a rate hike is warranted given the improving economic situation, adding that incoming data over the next week needs to be checked before the final decision can be made. Given that the rate hike is more or less priced in, commodities are unlikely to suffer a major shock when and if the eventual rates are hike in the Dec 15-16 meeting. Yellen also mentioned that subsequent rate hikes would be delayed as we go ahead. The major shocker last week was the OPEC meeting where not only did the cartel keep production steady, it actually removed the collective quota potential paving way for further supplies. With the inclusion of Indonesia into the group and further supply coming in from Iran going into next year, oil can only go down further.
Evening Update - Dec 07, 2015

News and Analysis US jobs data reinforced expectations of rate hike in Dec’15. German Industrial Production gained 0.2 percent in October. LME stocks declined by 0.8 percent on Friday. European markets are trading higher today on speculation a strengthening U.S. economy will boost the pace at which the Federal Reserve increases interest rates. Asian markets are trading mixed while US stock futures are trading in the green. German Industrial Production gained 0.2 percent in October as against a decline of 1.1 percent in September. Spot gold prices are trading lower today by $3.5 trading at $1082.7 per ounce while MCX gold prices are trading lower by 0.24 percent at Rs.25652 per 10 gms. Gold held near a three week high on Monday, boosted by short-covering after strong U.S. nonfarm payrolls data bolstered the case for a Federal Reserve rate hike next week. With speculators holding record short positions in COMEX gold and the dollar failing to gain much traction post payrolls data, some believe gold prices could see more upside.

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