..... . VALI disclosures . .....: 18/10/26, about Commodities Market

Sunday, October 18, 2026

18/10/26, about Commodities Market

Sticky inflation, uncertainty around the Federal Reserve's policy path, and a sharp pullback in technology stocks shaped global market sentiment this week, while renewed attacks on Gulf shipping routes pushed energy prices to their highest levels in five months.

The US Dollar Index ended the week at 101.77, down 0.4 percent, after briefly touching an 18-month high of 102.9. September CPI data showed headline inflation accelerating to 3.7 percent year-on-year from 3.4 percent, driven by higher energy costs, while core inflation rose 0.3 percent month-on-month against expectations of 0.2 percent. Despite the inflation surprise, the dollar's gains faded as a selloff in AI and semiconductor stocks triggered a rotation into government bonds, easing Treasury yields.

Fed Chair Kevin Warsh refrained from offering fresh policy guidance at the IMF and World Bank meetings in Bangkok, helping ease concerns of consecutive rate hikes. Fed officials continued to send mixed signals. John Williams supported one additional rate hike this year, Austan Goolsbee described the inflation data as discouraging, Beth Hammack warned further tightening may be needed if inflation expectations rise, while Michelle Bowman saw no immediate urgency to act.

Combined with softer labour market data, markets are now pricing roughly a 20 percent chance of a rate hike in October and close to a 90 percent probability in December. US equities ended mixed, with the Dow Jones posting gains while the S&P 500 fell nearly 2 percent and the Nasdaq declined 4.5 percent amid broad weakness in technology shares.

Precious metals came under pressure after the stronger-than-expected inflation print. Spot gold fell to a two-month low of $4,073 per ounce and silver dropped to $55.4 per ounce, its weakest level since July. Both metals later recovered as the dollar retreated toward a two-week low and investors increasingly expected the Fed to leave rates unchanged this month. Gold rebounded to $4,198 an ounce and ultimately settled near $4,165 an ounce, while silver closed around $57 an ounce, down roughly 6 percent for the week as markets balanced expectations of a policy pause against the likelihood of a December rate hike

Gold futures remain under pressure, trading below the 20-day EMA and Supertrend, indicating a weak near-term trend. Immediate support is placed at Rs 1,45,600 per 10 gram, and a sustained break below this level could drag prices towards Rs 1,43,350. On the upside, resistance is seen at Rs 1,50,000, followed by Rs 1,51,600; a sustained breakout above Rs 1,50,000 could improve the outlook.

Crude oil was the week's strongest performer, ending near five-month highs as geopolitical tensions and supply disruptions outweighed demand concerns. Brent largely traded between $104-107 a barrel, with gains capped after OPEC lowered its 2026 demand growth forecast and the IEA widened its projected demand contraction amid elevated prices and supply constraints.

However, Brent surged to settle at $109.86 a barrel on Friday, up 3.7 percent on the day and marking its highest close since May. The rally was driven by mounting supply risks, including attacks on vessels near the Strait of Hormuz, threats to Saudi export infrastructure and Ukrainian strikes on Russia's Ryazan refinery.

Tight diesel markets further supported prices, with inventories remaining critically low ahead of winter. The WTI-Brent spread narrowed from above $12 a barrel, its widest level in 11 years, to around $8 a barrel after a more than 8-million-barrel decline in US crude inventories boosted WTI, which gained nearly 11 percent for the week.

Base metals remained under pressure as inflation concerns and weaker risk appetite weighed on demand. Copper drifted toward $14,300 per tonne despite a mixed supply backdrop. An avalanche at Codelco's El Teniente mine temporarily disrupted operations, although the impacted area accounts for less than 10 percent of the mine's output. Aluminium touched an eight-month low, while zinc fell 3 percent, making it the weakest performer among base metals.

Looking ahead, China's third-quarter GDP and industrial production data will be key catalysts for commodity markets. Strong readings could reinforce confidence in recent stimulus measures and support industrial metals, while weaker figures may deepen concerns over underlying demand.

Attention will also turn to flash PMI releases from the US, Eurozone, Germany and the UK, with investors focusing closely on price and employment components for clues on inflation trends. For precious metals, movements in the dollar and Treasury yields are expected to remain the primary drivers. For copper, a preliminary agreement at Antofagasta's Centinela mine that averted a prolonged strike may lead to a weak start, leaving demand signals from China as the key driver.

For crude oil, developments around Hormuz shipping routes, Saudi energy infrastructure and tanker sanctions will remain critical. Additionally, the White House's decision to delay certain Russia-related sanctions could allow more Russian crude to reach global markets, potentially moderating further upside despite ongoing geopolitical risks.

Report by Kaynat Chainwala, Network18

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Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Sunday, October 18, 2026

18/10/26, about Commodities Market

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19/10/26, Closing Bell Snaps

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