FED, ECB, BOE policy and Union Budget will be our key drive for an upcoming month.
Global commodity and dollar were closed neutral last week. From the currency front USD/INR spot gained 0.66% and settled at 81.50 as compared to previous week close of 80.9620. US dollar posted slightly loss and settled at 101.9220 as compared to previous week close of 101.992.
On Friday U.S. reports showed the University of Michigan Jan consumer sentiment climbed to a 9-month high, and Dec pending home sales unexpectedly increased. Both data supported for the dollar. However, strength in stocks Friday cubed liquidity demand for the dollar.
Precious metals came in under pressure at the weekend as dollar found some support. Also, higher global bond yields were bearish for metals prices. In addition, rally in the S&P 500 to a 6-week high curbed safe-haven demand for precious metals. Gold prices recouped most of their losses Friday after the U.S. Dec PCE core deflator rose at the slowest pace in 14 months. That bolstered speculation the Fed, may slow its rate hike campaign.
MCX GOLD Future settled at 568757, retreated from weekly high 57125, up 0.35%. Comex Gold Future $1929.40, up 0.06%, retreated from weekly high $1949.80.
However, after struggling in between gains and losses, MCX SILVER Future settled down by 0.32% at 68329, while Comex Silver Future at $23.620, down 1.31%.
Crude Oil retreated more than 1.70% and settled at 6506 as compared to previous week close of 6620. Nymex Crude Future settled down by 2.80% at $79.36. MCX Natural gas settled down by 9.86% at 236.7 as compared to previous close of 262.60, while Nymex Natural Gas future settled up by 1.87% at $ 3.108.
Base metals remained somewhat positive, where Copper future gained 0.96% in MCX and settled at 783.55 as compared to previous week close 776.10, Comex Copper down 0.68%% and settled at $4.225 as compared to previous week close of $4.2515. MCX Aluminum Future settled with 2.11% gain at 225.25. ZINC future gained 1.07% and settled at 298.85, while Lead prices retreated from the weekly high 190 and settle down by 0.85% at 187.45.
Next week world major central bank Fed, ECB, BOE will take decision. During policy commodity prices and currency market expect to show huge volatility. Federal Reserve is expected to slow the pace of interest rate hikes the European Central Bank and the Bank of England are both expected to hike rates by 50 basis points.
U.S. economic data for next week
U.S. is to publish CB Consumer Confidence on Tuesday with forecast to have expanded by 109.20 as compared to previous reading 108.30. Data may have positive impact for dollar.
Economic calendar also includes data on ADP Non-Farm Employment Change, ISM Manufacturing PMI and JOLTS Job Openings on Wednesday and the Non-Farm Employment Change, Unemployment Rate on Friday expect to give clutter for dollar.
New Zealand
New Zealand is to release Employment Change q/q on Tuesday. Data could have negative impact on dollar as it foreseen at 0.3% lower than previous reading 1.3%. On same day, Unemployment Rate may have neutral impact as data foreseen unchanged at 3.3%.
Euro zone economic data for next week
Euro zone CPI Flash Estimate y/y (forecast 9.0%, previous 9.2%) and Core CPI Flash Estimate y/y (forecast 5.1%, previous 5.2%) is due to release on Wednesday. Both data may have negative impact on Euro.
Foremost important event from Euro zone will be European Central Bank decision on Thursday. Rate hike decision may have positive impact for Euro.
Canada economic data for next week
Canada is to release GDP data on Tuesday which may create positive momentum for dollar and metal prices. Data is foreseen at 0.2% higher than previous reading 0.1%.
UK economic data for next week
From UK, foremost important event will BOE policy decision. Bank is expected to deliver its tenth rate hike since December 2021 on Thursday.
Copper outlook
Sentiment may turn negative, if it failed to break resistance 802.50.
Weakness in dollar continued supported Copper future last week also. However, optimism and uncertainty surrounding the Chinese reopening and weaker economic data have started to damage industrial metals. This sentiment restricted upside momentum in metals prices last week.
U.S. dollar gave up early gains and moved slightly lower. Speculation that Fed will soon pause its rate hike campaign after the Bank of Canada policy last week. BOC raised interest rates by +25 bp and announced will pause rate hikes to weigh the impact of prior tightening. Dollar initially moved higher on increased liquidity demand after global financial market retreated.
Adding to this, on spot market in addition to the reduction in work efficiency of market participants due to the pandemic earlier and the recent Chinese New Year holiday also hold range bound sentiment in the Copper prices.
MCX Copper Future consolidated near to its previous week high and settled at 783.55 as compared to previous week close of 776.10.
Technically, Weekly price action resulted in formation of high wave candle stick which creating probability for indecisiveness. Adding to this, RSI 14 and its 9 SMA is trading at overbought zone. This is indicating for short term correction may take place.
Further, copper future is trading near to June 2022 high. Copper future would need to break above 802.50 in order to test next resistance 815.00. Alternatively, any rise towards 788-792 could attract selling activities. Downside target expected at 772, with stop loss above 802.50.
Further, global recession jitters, Fed Policy decision and India Union Budget exceptions may hold volatile momentum during week.