Most Commodities trend lower as upbeat payrolls data support US Dollar Index
Most Commodities in international market trade sideways to lower amid rebound in US bond yields following upbeat payrolls data from US.
COMEX Gold prices trade modestly lower near $1725 while Silver is down 0.5%, Copper prices at COMEX are up more than 2% while crude oil trades more than
2% lower near $60.11. LME is closed today on account of Easter Monday.
On equity front, many markets are closed today for holidays, including China and Hong Kong, as well as much of Europe. Of the ones that are open Japanese indices ended on a higher note while Dow futures are up nearly 200 points.
On macro front, global risk appetite has improved following Friday’s upbeat payrolls data from US. US nonfarm payrolls surged by 916,000 jobs in March, the biggest gain since last August, beating analysts expectation of 647,000 while unemployment rate eased to 6% from prior month’s 6.2%. The jump in payrolls have led to rally across treasuries from last week’s selloff with the benchmark 10-year yield steadying around 1.71%. (Bloomberg)
The rebound in US bond yields have led to recovery in US Dollar Index from day’s low which in turn is weighing on commodities at large. US Dollar Index that had hit the lows of 92.92 earlier in the day trades marginally higher near 93.05.
Amongst other factors, market may follow the debate over US President Joe Biden’s $2.25 trillion infrastructure proposal, as Republicans expressed guarded support for a more limited plan. (Bloomberg)
Furthermore, on virus front, support due to positive development on vaccination front is countered by worries over resurgence in global infection levels. On vaccination front, China is ramping up its vaccination push, aiming to be twice as fast as the US, and a leader of the World Health Organization’s program said the rollout of shots will be expanded to 100 countries in the next couple of weeks, from 84 at present. (Bloomberg) Furthermore, as per Bloomberg vaccination tracker, more than 658 million doses have been administered across 151 countries with the latest rate being roughly 16.5 million doses a day.
However, on weaker note, new infections in India climbed to more than 100,000 over the last 24-hours, a record increase that pushed Maharashtra, its richest state to order offices to work from home and shut malls and restaurants through April. With a total of more than 12.5 million cases, India holds the world’s thirdlargest tally after the US and Brazil (Bloomberg) Meanwhile on global front, cases have exceeded 131.1 million whilst deaths have exceeded 2.8 million.
Overall, we expect most commodities to witness choppy trade today with bias being sideways to lower tracking recovery in US Dollar Index with further cues coming in from US data.
Day Ahead
Focus for the day may be on US Services PMI and factory orders data and its impact on US Dollar. Also focus may continue to be development related to virus spread and vaccination rollout and its impact on US dollar as well as general risk sentimen
Report By- Kotak Securities
Report Date – 5 April 2021
Analysts -Priyanka Jhaveri ; Ashok Kamarani
Please see Disclosure/Disclaimer at the end of the report
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