GENERAL MARKET CONDITIONS

Expectations of a half a percentage interest rate hike has increased after last week’s March payroll numbers which will support metals and energy prices at lower levels. The US dollar will trade with a softer bias unless the European central bank says that it will cut interest rates. Copper continues to rise with LME copper heading for $9000 as long as $8500 holds. Copper is the driver for base metals. Copper’s rise/fall directly affects other base metals. Nickel (LME) needs to break $31000 for another attempt at $37000 in the short term. Base metals will be volatile for the rest of April caught between global growth factors and liquidity factors. However we do not expect any major slide in base metals till the Olympics unless equity markets have a sustained medium term bull run.

The Indian rupee is caught between inflation and volatile stock markets. Inflation reached seven percent for the week ended March 22. The government will try and let the rupee appreciate to 39.50 and 39.00 to reduce inflation. An interest rate cut by the reserve bank of India in its annual policy meeting this month is out of question. There is speculation of a cash reserve ratio (CRR) hike. Indian rupee’s short term performance will be dependent on foreign portfolio flows. Unless the stock markets rise substantially, short term gains in the rupee will be limited.

It will be a technical trade in all metals and energies this week.

COPPER -- MAY FUTURE -- INTRA DAY PIVOT: $392.0

Copper targets $403.80 and $416.90 as long as $388 holds. Copper has to fall below $388 for $372.

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $104.10

Crude oil has to break $110-$112 this week else a fall to $99 and $96.

MCXARUN
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