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Crude Rebounds In Asian Trades, Local Futures To Eye INR

WTI Crude oil futures saw volatile movement as the US equities fell sharply despite a surprise rate cut of 50 basis points from the US Fed. Oil had soared sharply in tune with risky assets on expectations that central banks will likely announce financial stimulus to offset the negative impacts of the coronavirus outbreak on economy. Oil market is also focusing that producing cartel OPEC will come up with deeper output cuts to boost prices and this pushed up the prices in Asia today. WTI Crude oil futures are currently quoting at $48 per barrel, up 1.70% on the day. MCX Crude oil futures gained by 0.38% to close at Rs 3444 per barrel after hitting a high of Rs 3560 per barrel. Local crude oil is also expected to track the movement in Indian Rupee. INR saw yet another bout of selling yesterday as concerns over domestic economic growth stayed in place. INR closed at 73.23 per US dollar, giving up 47 paise on the day. The INR fell to 73.34 per US dollar – its lowest level in nearly 16 months.


Gold Soars Sharply On Fed Rate Cut

Gold jumped nearly three percent yesterday as the US Federal Reserve announced an emergency interest rate cut on Tuesday in response to the economic risks posed by the coronavirus outbreak. The Fed announced that it has decided to lower the target range for the federal funds rate by 50 basis points to 1 to 1.25%. DOW tumbled despite a surprise rate cut from the US Fed as markets stayed worried about near term impact of coronavirus. The officials from the Group of Seven nations vowed Tuesday to use all appropriate policy tools to prevent the coronavirus crisis from damaging the global economy, but held back on unveiling specific relief measures. Such conflicting moves in markets and policymaking pushed up Gold well above $1600 per ounce and the COMEX Gold futures currently trade flat at $1644 per ounce. MCX Gold futures closed at Rs 43500 per 10 grams, up 3.70% on the day.


Copper Off One Week Top

Copper futures eased from one week high yesterday amid economic worries and currently trade at $2.59 per pound, up 0.40% on the day. MCX Copper closed down 0.70% at Rs 426 per kg amid these cues. OECD noted that Industrial production continued to stagnate in late 2019, and the growth of consumer spending lost momentum despite continued steady employment gains. The pace of the decline in global car sales moderated through 2019, but demand has subsequently tumbled again, with provisional data suggesting a monthly decline of 10% in sales in January 2020, with a 20% decline in China. Global trade also remains very weak. Merchandise trade volumes contracted in the fourth quarter of 2019, and declined in 2019 as a whole, the first calendar year fall since 2009.


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