SYSTEMATIX SHARES AND STOCKS (INDIA) LIMITED PCG Research

Transcription

1 SYSTEMATIX SHARES AND STOCKS (INDIA) LIMITED PCG Research Daily Forex Report as on Wednesday, October 17, 2018 Emerging Markets Indices Close % Chg. BSE SENSEX S&P CNX Nifty Bovespa (Brazil) Asian Markets Nikkei Hang Seng Strait Times US Markets Dow Jones Nasdaq S&P European Markets CAC DAX FTSE Britain s businesses are suffering from Brexit-related uncertainty as exports slow, recruitment difficulties mount and investment plans are scaled back, two surveys showed. The British Chambers of Commerce said its survey of 5,600 companies, the largest of its kind in Britain, showed services firms were having the most trouble finding staff since the survey began in 1989, and growth in factory exports was the slowest since late Last week Prime Minister Theresa May told her Conservative Party to back her plan to leave the European Union as Britain entered the toughest part of the negotiations. Diplomatic sources told the EU s Brexit negotiators see a divorce deal as very close. Britain s economy has lagged behind the growth rate of many other rich countries for much of the period since the 2016 Brexit vote. The BCC s quarterly survey showed that the percentage of services businesses looking to recruit more staff over the next three months fell to 47 percent from 60 percent, the lowest since the first quarter of Seventy-two percent of firms reported recruitment difficulties, the highest on record. China s services sector grew at its fastest clip in three months in September on improved demand, a private survey showed on Monday, though sentiment worsened as firms started shedding jobs after over two years of expansion while rising cost pressures pointed to a squeeze on profit margins. The Caixin/Markit services purchasing managers index (PMI) rose to 53.1 in September from 51.5 in August, and staying above the 50 level that separates growth from contraction. The faster growth is a welcome signal for a key part of the world s second-largest economy as it faces rising headwinds from a heated trade row with the United States. An official gauge of the nonmanufacturing sector for last month published on Sept 30 also pointed to continued expansion, which analysts say was largely driven by a jump in construction in a sign the government s fiscal easing may be gaining traction. survey showed most of the pick-up came from higher new business orders, as the sub-index rose at its quickest pace in three months with a reading of 52.4, compared to 51.7 in August. China is counting on services, particularly high value-added services in finance and technology, to lessen the economy s traditional reliance on heavy industry and investment. Policymakers have also quickened project approvals lately to prop up infrastructure investment growth. Trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) 16/10/2018 Buy Value Sell Value Net Value FII's 3, , , DII's 3, , , Source - NSE Japan and the United States will hold a third round of bilateral economic dialogue when U.S. Vice President Mike Pence visits Japan in mid-november, Japanese government officials said. During his visit, Pence will hold talks with Prime Minister Shinzo Abe and his deputy, Taro Aso, on topics ranging from trade, economic policy and North Korea, the officials said on condition of anonymity as they were not authorized to speak publicly. His visit would come after the two countries kicked off bilateral trade talks in an arrangement that, for now, protects Japanese automakers from further tariffs, seen as a major threat to the export-dependent economy. The trade talks are led by Japan s Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer, who met in August to start what the two sides call free, fair and reciprocal negotiations. The trade talks fall within broader bilateral economic discussions led by Pence and Deputy Prime Minister Taro Aso, who is also finance minister. U.S. President Donald Trump has made clear he is unhappy with Japan s $69 billion trade surplus with the United States and wants a bilateral free agreement.

2 Currency Table Product Exp. Date Open High Low Close % Change O.Int % Cng OI Volume ATP USD-INR Oct EUR-INR Oct GBP-INR Oct JPY-INR Oct MAJOR CURRENCY CROSS RATES Last Trade INR U.S. $ Euro U.K. en RBI Reference Rate 1 INR = Date Last Previous 1 U.S. $ = USD Euro = EURO U.K. = YEN en = GBP Market Update ECONOMICAL DATA Market Update Final CPI y/y Name Rate % Change Name Rate % Change EURUSD Final Core CPI y/y GOLD GBPUSD German 30-y Bond Auction SILVER USDJPY Building Permits CRUDE EURGBP Housing Starts NAT.GAS EURJPY Crude Oil Inventories COPPER GBPJPY FOMC Meeting Minutes ZINC AUDINR NICKEL USDMYR ALUMINIUM SPREAD MATRIX FOR USDINR SPREAD MATRIX FOR EURINR MONTH RATE OCT NOV DEC MONTH RATE OCT NOV DEC OCT OCT NOV NOV DEC DEC SPREAD MATRIX FOR GBPINR SPREAD MATRIX FOR JPYINR MONTH RATE OCT NOV DEC MONTH RATE OCT NOV DEC OCT OCT NOV NOV DEC DEC

3 USD - INR OPEN HIGH LOW CLOSE % CNG RS. CNG VOLUME OPEN INT SUP RES PIVOT POINT TECHNICAL OUTLOOK USD - INR Rupee gained on selling by banks across segment along with exporters amid overseas fund inflows into local stocks. Meanwhile, local stocks extended gains as favourable trade data influenced buying from overseas and local fund as deficit fears ebbed. India s retail inflation rose marginally in September, nudged up by food and fuel prices, but short of the Reserve Bank of India s 4 percent medium-term target, strengthening views it could tighten monetary policy in December following unchanged rates last week. The monetary policy committee (MPC) of the RBI left the repo rate at 6.50 percent while reiterating its target of keeping consumer inflation at 4.00 percent in the medium term on a durable basis. In September, consumer prices rose 3.77 percent from a year earlier, compared with a 3.69 percent increase in August, the Statistics Ministry said. Slower inflation in food prices, which make up nearly half of India s consumer price index (CPI), has so far cancelled out rises in imported goods following the weakening rupee. Food inflation rose to 0.51 percent from a year earlier, against 0.29 percent in August. India is likely to overshoot its fiscal deficit target for 2018/19 by a small margin following its decision to cut fuel excise duties, Moody's Investors Service said, describing the move as "credit negative". The government announced cuts in excise duty on gasoline and diesel last week, to soften the impact of sharp rise in global crude oil prices on consumers. Technically now USDINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at 73.84, a move above could see prices testing SELL USDINR OCT SL TGT NSE

4 EURO - INR OPEN HIGH LOW CLOSE % CNG RS. CNG VOLUME OPEN INT SUP RES PIVOT POINT OUTLOOK EURO - INR Euro dropped as the U.S. dollar edged up after it was dented by weak U.S. retail sales data. Chancellor Angela Merkel s Bavarian sister party said it would back political stability in Berlin after suffering big losses in a regional election that their far-right foes hailed as an earthquake that would rock the coalition government. The European Central Bank lowered the ceiling on emergency liquidity assistance (ELA) Greek banks draw from the domestic central bank by 200 million euros to 5.0 billion euros ($5.74 billion), the Bank of Greece said. The move reflected improved liquidity conditions, taking into account private sector deposit flows and banks access to financial markets, it said. The ELA ceiling is valid through to Nov 7. Greek banks have relied on emergency liquidity assistance (ELA) since February 2015 after being cut off from the ECB s funding window. Emergency funding is more costly than borrowing directly from the ECB. In June 2016 the ECB reinstated Greek banks access to its cheap funding operations, allowing lenders to reduce their dependence on the emergency liquidity lifeline. German manufacturers added more employees during August compared to a year ago, preliminary figures the Federal Statistical Office showed. The number of employees in the manufacturing units with 50 or more persons grew by about 149,000 persons or 2.7 percent from the same period last year to 5.7 million. Technically now EURINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at 85.62, a move above could see prices testing SELL EURINR OCT SL TGT NSE

5 GBP - INR OPEN HIGH LOW CLOSE % CNG RS. CNG VOLUME OPEN INT SUP RES PIVOT POINT OUTLOOK GBP - INR GBP remained under pressure as Brexit negotiations faltered before a crucial European Union summit later this week. Less than six months before Britain leaves the bloc negotiators from both sides are trying to overcome the biggest hurdle to a deal - how to keep the UK frontier with the Irish Republic free of border checks after Britain leaves the EU in March. Prime Minister Theresa May said she believed a deal was achievable and urged the EU not to allow a stand-off over the so-called Irish backstop to derail the talks. EU negotiator Michel Barnier said a gap still needed to be bridged between his backstop demands that Northern Ireland stay in the EU s economic zone and London s rejection of any checks on trade between the province and the British mainland. Britain and the EU have paused Brexit negotiations until leaders of member states meet in Brussels. It is not clear what leaders will be able to agree on at a dinner on Wednesday before Prime Minister May joins them at a regular summit. Even if the Irish border issue is resolved, investors fear it could signal the start of another, potentially tougher battle for May with her own lawmakers who want a cleaner break from Europe. Hedge funds resumed shorting the British currency, raising net short bets to their highest level since May 2017 after cutting short bets in the two weeks before that, according to futures data. Technically now GBPINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at , a move above could see prices testing SELL GBPINR OCT SL TGT NSE

6 OPEN HIGH LOW CLOSE % CNG RS. CNG VOLUME OPEN INT SUP JPY - INR RES PIVOT POINT OUTLOOK JPY - INR JPY traded in range as investors turned risk averse over trade spat between the US and China and rising interest rates in advanced economies. Data suggested consumers were reluctant to spend, and came as U.S. bond yields cooled off from its seven-year high last week. Japanese Finance Minister Taro Aso said that the U.S. government had not spoken to Tokyo about including provisions against currency manipulation in free trade talks. Aso's comments come after U.S. Treasury Secretary Steven Mnuchin said that Washington wants to include a provision to deter currency manipulation in future trade deals, including the one it is negotiating with Japan. The new provisions would be based on the currency chapter in its new deal to revamp NAFTA. Mnuchin's remarks have raised concerns that the Japanese government's efforts to keep currency policy separate from free trade talks are not working, and that it could be dragged into a dispute with Washington about the yen's valuation. "The U.S. side has not brought up the issue of currencies since we agreed in February last year that these matters would be discussed between Mnuchin and myself," Aso said. The U.S. government is pushing to re-write trade relationships to lower its trade deficit and change conditions it considers unfair to U.S. workers and companies. The Trump administration has engaged in a tit-for-tat tariff war with China and wants to make currencies a central part of any solution to its trade dispute with China. Technically now JPYINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at 66.08, a move above could see prices testing SELL JPYINR OCT SL TGT NSE

7