Currency Daily

Transcription

1 Currency Daily Market commentary Indian rupee rebounded sharply in early trades, but pared some gains before closing higher by 1paise at per dollar amid expectations that the ruling BJP will emerge victorious in Gujarat polls. The local unit was largely supported by a weaker dollar overseas, after the U.S. central bank rate hike overnight even as domestic inflation accelerated further to 3.93% in November. India's CAD for the second quarter doubled to $7.2bn, or 1.2% of GDP fiscal on annual basis, but narrowed sharply from $15bn (2.5% of GDP) in the preceding quarter, official data showed. In cross-currency trades, the rupee fell further against the pound to close at from 86.1 per pound and drifted against the Japanese yen to close at per 1 yens from in the previous session. In forward market, premium for dollar declined owing to mild receiving from exporters. The 6-month premium payable in May edged down to paise from paise, while the far forward October 218 contract also fell to paise to paise in the previous session. Domestic equities closed higher, rebounding from two days of losses, after the U.S. Federal Reserve raised rates but kept its outlook unchanged, although caution remained ahead of the release of exit polls from elections in the state of Gujarat. The U.S. dollar rallied, as economic data from the U.S. showed signs of an expanding economy. U.S. retail sales surged more than expected in November, while jobless claims fell unexpectedly, pointing to sustained growth and a strengthening economy. The euro pulled back from early gains against the dollar, after the European Central Bank kept monetary policy on hold and revised up its forecast for growth and inflation, but added that underlying inflation remains subdued. U.K's pound pared losses, after the Bank of England left bank rates on hold, just one month after raising the interest rate in more than a decade. FOREX synopsis Futures High Low Close %Chg OI %Chg Spot Close Prev close %Chg NSE Rupee (.15) INR-Dollar (Dec) (.18) 4.63 Euro (.41) INR-Dollar (Jan) (.17) (3.97) British Pound Japanese Yen (.13) INR-Euro (Dec) (7.78) Australian($) INR-Euro (Jan) Swiss Franc Canadian($) (.16) INR-Pound (Dec) (5.38) Dollar Index INR-Pound (Jan) Global Equities INR-Yen (Dec) (11.38) Jankets Close Prev close %Chg INR-Yen (Jan) Asia Sensex 33, , Forward Rates Nifty 1, , Rupee per Close Prev close %Chg Nikkie 22, ,758.7 (.28) 1-month (.14) Hang Seng 29, ,222.1 (.19) 3-month (.11) Shanghai 3, ,33.4 (.32) RBI Reference rate Rupee per Close Prev close %Chg America Straits Times 3, , (.95) Dollar (.27) Dow Jones 24, , (.31) Euro Nasdaq 6, ,875.8 (.28) Pound Yen Europe CAC 5, , (.78) Commodities DAX 13, , (.44) Close Prev close %Chg FTSE 7, , (.65) Spot Gold 28, ,347. (3.51) Spot Silver 37,54. 39,3. (5.72) FII's Flow Equity (in Rs cr.) Debt (in Rs cr.) Net Crude oil 3,651. 3,678. (.73) As on Dec (138.33) (237.9) Copper (1.74) As on Dec (444.89) (46.1)

2 Pivot Levels Futures R3 R2 R1 Pivot S1 S2 S3 INR-Dollar (Dec) INR-Dollar (Jan) INR-Euro (Dec) INR-Euro (Jan) INR-Pound (Dec) INR-Pound (Jan) INR-Yen (Dec) INR-Yen (Jan) Spot R3 R2 R1 Pivot S1 S2 S3 Indian Rupee Euro British Pound Japanese Yen Australian($) Canadian($) Swiss Franc Dollar Index A pivot is a level at which the market direction changes for the day. These points can be critical support and resistance levels for that day. Pivot levels are only broad indicators and not necessarily our view on the currency. Technical Alerts USD-INR (Dec. Futures) The currency pair holds resistance , while on the down side prices may test Indian Rupee s premium in Futures market Contract Spot Futures Premium 1-month month month month month month

3 USD-INR options OI analysis Near month i.e. Dec. 3 Call OI 25 Put OI Call OI chg. Put OI chg Near +1 i.e. Jan Call OI Put OI Call OI chg. Put OI chg Call OI additions Call OI unwinding Put OI additions Put OI unwinding calls, call, calls. 63 call, calls, 65 call, 65.5 call, calls put, put, put, put. 64 put, 64.5 put, puts. Outlook: The currency pair may see support around , while on the upside resistance is seen at

4 Economic calendar Date Country / Currency Event IST Actual Cons. Previous 12-Dec JPY Tertiary Industry Index (m-o-m) 1:.3%.2% -.2% GBP CPIH (y-o-y) 15: 2.8% 2.9% 2.8% GBP Consumer Price Index (m-o-m) 15:.3%.2%.1% GBP Consumer Price Index (y-o-y) 15: 3.1% 3.% 3.% GBP Core Consumer Price Index (y-o-y) 15: 2.7% 2.7% 2.7% EUR German ZEW Survey Current Situation 15: EUR Euro-Zone ZEW Survey (Economic Sentiment) 15: EUR German ZEW Survey Expectations 15: Dec USD Monthly Budget Statement :3 -$139b -$135.b -$136.7b EUR German Consumer Price Index (m-o-m) 12:3.3%.3%.3% EUR German Consumer Price Index (y-o-y) 12:3 1.8% 1.8% 1.8% BOJ Kuroda makes a brief speech at Economists' JPY Gathering 14:3 GBP Claimant Count Rate 15: 2.3% 2.3% GBP Jobless Claims Change 15: 5.9k 6.5k GBP Average Weekly Earnings (3M/y-o-y) 15: 2.5% 2.5% 2.3% GBP Weekly Earnings ex-bonus (3M/y-o-y) 15: 2.3% 2.2% 2.2% GBP ILO Unemployment Rate 3Mths 15: 4.3% 4.2% 4.3% GBP Employment Change 3M/3M 15: -56k -48k -14k EUR Euro-Zone Industrial Production w.d.a. (y-o-y) 15:3 3.7% 3.3% 3.4% EUR Euro-Zone Employment (y-o-y) 15:3 1.7% 1.6% USD Consumer Price Index (m-o-m) 19:.4%.4%.1% USD CPI Ex Food and Energy (m-o-m) 19:.1%.2%.2% USD Consumer Price Index (y-o-y) 19: 2.2% 2.2% 2.% USD CPI Ex Food and Energy (y-o-y) 19: 1.7% 1.8% 1.8% USD Real Avg. Weekly Earnings (y-o-y) 19:.8%.3% USD Real Avg. Hourly Earnings (y-o-y) 19:.2%.2% USD DOE U.S. Crude Oil Inventories 21: -5117k -2894K -561k USD DOE Cushing OK Crude Inventory 21: -3317k -2753k USD DOE U.S. Gasoline Inventories 21: 5664k 23K 678k USD DOE U.S. Distillate Inventory 21: -137k 12K 1667k 14-Dec USD FOMC Rate Decision (Upper Bound) :3 1.5% 1.5% 1.25% USD FOMC Rate Decision (Lower Bound) :3 1.25% 1.25% 1.% Yellen Holds Press Conference Following FOMC USD Meeting 1: JPY Nikkei Japan PMI Manufacturing 6: CNY Retail Sales (y-o-y) 7:3 1.2% 1.3% 1.% CNY Retail Sales YTD (y-o-y) 7:3 1.3% 1.3% 1.3% CNY Fixed Assets Ex Rural YTD (y-o-y) 7:3 7.2% 7.2% 7.3% CNY Industrial Production (y-o-y) 7:3 6.1% 6.2% 6.2% CNY Industrial Production YTD (y-o-y) 7:3 6.6% 6.6% 6.7% JPY Industrial Production (y-o-y) 1: 5.9% 5.9% CHF SNB Sight Deposit Interest Rate 14: -.75% -.75% -.75% CHF SNB 3-Month Libor Lower Target Range 14: -1.25% -1.25% -1.25% CHF SNB 3-Month Libor Upper Target Range 14: -.25% -.25% -.25% EUR Markit/BME Germany Manufacturing PMI 14: EUR Markit Germany Services PMI 14: EUR Markit/BME Germany Composite PMI 14: EUR Markit Euro zone Manufacturing PMI 14: EUR Markit Euro zone Services PMI 14: EUR Markit Euro zone Composite PMI 14: GBP Bank of England Bank Rate 17:3.5%.5%.5% GBP BOE Asset Purchase Target 17:3 435b 435b 435b GBP BOE Corporate Bond Target 17:3 1b 1b 1b

5 EUR European Central Bank Rate Decision 18:15.%.%.% EUR ECB Marginal Lending Facility 18:15.25%.25%.25% EUR ECB Deposit Facility Rate 18:15 -.4% -.4% -.4% ECB President Draghi holds news conference in EUR Frankfurt 19: USD Initial Jobless Claims 19: 225k 239k 236k USD Continuing Claims 19: 1886k 19k 1913k USD Retail Sales Advance (m-o-m) 19:.8%.3%.2% USD Retail Sales Ex Auto and Gas 19:.8%.3%.4% USD Retail Sales Control Group 19:.3%.3% USD Import Price Index ex Petroleum (m-o-m) 19:.1%.1%.1% USD Export Price Index (y-o-y) 19: 3.1% 2.7% USD Markit US Manufacturing PMI 2: USD Markit US Services PMI 2: USD Markit US Composite PMI 2: USD Business Inventories 2:3 -.1% -.1%.% USD EIA Natural Gas Storage Change 21: Dec MXN Overnight Rate :3 7.25% 7.% USD Industrial Production (m-o-m) 19:45.3%.9% USD Manufacturing (SIC) Production 19:45.2% 1.3% USD Baker Hughes U.S. Rig Count 23: USD Net Long-term TIC Flows 2:3 $8.9b

6 Commodity Research Team Pranav Mer Sr. Manager - Research / pranav.mer@adityavbirlacapital.com Sunil Darekar Advisor / sunil.darekar@adityabirlacapital.com Disclaimer: This document is not for public distribution and is meant solely for the personal information of the authorised recipient. No part of the information must be altered, transmitted, copied, distributed or reproduced in any form to any other person. Persons into whose possession this document may come are required to observe these restrictions. This document is for general information purposes only and does not constitute an investment advice or an offer to sell or solicitation of an offer to buy / sell any security and is not intended for distribution in countries where distribution of such material is subject to any licensing, registration or other legal requirements. The information, opinion, views contained in this document are as per prevailing conditions and are of the date of appearing on this material only and are subject to change. No reliance may be placed for any purpose whatsoever on the information contained in this document or on its completeness. Neither Aditya Birla Money Limited (ABML), its associate group companies, its directors, associates, employees nor any person connected with it accepts any liability or loss arising from the use of this document. The views and opinions expressed herein by the author in the document are his own and do not reflect the views of Aditya Birla Money Limited or any of its associate or group companies. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. Past performance is no guarantee and does not indicate or guide to future performance. Nothing in this document is intended to constitute legal, tax or investment advice, or an opinion regarding the appropriateness of any investment, or a solicitation of any type. The contents in this document are intended for general information purposes only. This document or information mentioned therefore should not form the basis of and should not be relied upon in connection with making any investment. The investment may not be suited to all the categories of investors. The recipients should therefore obtain your own professional, legal, tax and financial advice and assessment of their risk profile and financial condition before considering any decision. Aditya Birla Money Limited, its associate and group companies, its directors, associates, employees from time to time may have various interests/ positions in any of the securities of the Company(ies) mentioned therein or be engaged in any other transactions involving such securities or otherwise in other securities of the companies / organisation mentioned in the document or may have other interest with respect of any recommendation and / related information and opinions Aditya Birla Money Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 214. SEBI Reg. No. INH2145