Daily Market Report 15 th Oct 15

Transcription

1 [Type text] Daily Market Report 15 th Oct 15 Research Team IFA Global

2 Domestic and International Highlights Indian rupee opened at after closing the previous session at levels. The intra-day range is seen between levels. US retail sales loses steam; economic worry deepens US retail sales rose by just 0.1% in September, raising concerns that consumer spending, a key driver of US economy is slowing. The PPI index, the measure of inflation at the first point of sale, also fell by 0.5% signalling that inflation is nowhere near the Fed's target of 2%. Cable pops Up as Unemployment Rate near 7 year low UK economy, which has been struggling with tepid inflation and weak growth, has shown some strength in labor markets. The UK's unemployment rate has fallen to 5.4% levels, last seen in August 2008, while average earnings growth remained stable at 3% levels. BoE Governor, Mark Carney has retained his faith in UK's markets, while expected that wage growth pick up will support the consumer inflation. The GBP/USD pair, which fell below 1.53 handle, has rebounded sharply towards 1.55 handle. Government announces measures to bring down prices of pulses With pulses spiking to a record of up to Rs 190 per kg, the government on Wednesday swung into action with a number of measures including use of price stabilization fund and imports to cool prices and create a buffer stock. An inter-ministerial group headed by finance minister Arun Jaitley reviewed the price situation as rates peaked to Rs a kilogram in retail markets across the country. Jaitley said the government has decided to invoke the Rs 500-crore Price Stabilization Fund that will be used to pay for transportation, handling, milling and processing aimed at reducing the cost of imported pulses. Indian 10 Year Bond Yield Indian bonds continued to gain buoyed by the fall in us treasury yields and crude oil prices. Bond markets are likely to trade with positive bias as US Fed hike seems a distant dream as US retail sales & PPI index fell unexpectedly. Some profit booking is likely before the weekly bond auction. Intraday range is seen between 7.52%-7.57%.

3 USD/INR Daily Chart Source: Reuters Technical Outlook The USD/INR pair has reversed after taking support at 61.80% Fibonacci retracement. We are observing a bullish hidden divergence suggesting strength in the pair. Overall Outlook & Strategy Trend: The USD/INR pair has reversed after taking support at levels which is the 61.8% Fibonacci Retracement and also close to the crucial trend line support. Exporters were advised to cover short term position at levels of levels. Hold for further cover. (They are suggested to discuss their positions with their respective advisors). Importers are advised to cover on dips around for the near term. (They are suggested to discuss their positions with their respective advisors). Short term range (7-15 days): Medium term range (3-6 months):

4 Glance at G7 EUR / USD The EUR/USD pair spiked to its seven week high levels as US core retail sales slipped into negative territory, easing concerns of interest rate hike in near term. Interestingly, the weak European economic numbers, industrial production declined by 0.50%, failed to deny Euro gains. GBP / USD The GBP/USD pair, which fell below 1.53 handle, has rebounded sharply towards 1.55 handle after the release of improved labour market data. The UK s unemployment rate fell to its 7 year low of 5.4% and wage growth remained steady at 3%. AUD / USD The Aussie bounced after taking support near the 0.73 handle overnight as US retail sales disappointed, fuelling a rally in the pair. Gold prices continued to jump higher, touching a 3-month high which also boosted the resource linked Aussie. The pair will take further cues from RBA s Financial Stability Review due tomorrow. USD/ JPY The USD/JPY continued to drift lower after broad based dollar selling in the wake of disappointing economic data from the US. The pair is drifting lower as dollar index continues to lose momentum on one hand and BoJ continues to be silent on the other hand. BoJ is widely expected to increase the QE quantum as the recent spate of economic data from Japan does clearly indicate that the economy is slowing. Gold Gold prices futures climbed Wednesday to log a fourth straight session of gains, as a weaker U.S. dollar helped prices finish at their highest level in almost four months. After Wednesday s price settlement, gold moved even higher on the release of the Federal Reserve s Beige Book, which indicated some slowing in the economy. Crude WTI Crude Oil prices fell again on Wednesday as concerns of a growing global supply glut negated optimism in recent weeks about declining U.S. production. Crude futures have lost 7% so far this week, sliding without stop since Monday after OPEC reportedly pumped 110,000 barrels per day more in September than in August, and nearly 2 million bpd above forecast demand for 2015.

5 Dollar Index The US dollar was broadly sold off against major currencies as US retail sales continue to put dismal picture of economic recovery. The US core-retail sales, which released at -0.1% slipped into negative territory. Going forward, the US dollar will take further cues from CPI inflation data, scheduled to release later during the day. Economic Calendar Date 13-Oct-Tue 13-Oct-Tue 16-Oct-Fri Description GBP CPI y/y EUR German ZEW Economic Sentiment CNY - CPI y/y GBP Claimant Count Change USD PPI m/m USD Retail Sales m/m AUD Unemployment Rate AUD Employment Change USD FED Meeting Minutes USD CPI m/m USD Unemployment Claims USD Philly Fed Manufacturing Index USD Prelim UoM Consumer Sentiment

6 ABOUT US IFA Global is one of the leading Treasury Solutions firm.we help companies explore extraordinary opportunities, manage and sustain growth through efficiency and transparency. We have always believed that every client needs a bespoke offering and we have a long history of serving clients with tailored offerings as per their needs. Since 2005, we have been a trusted partner with over 300 permanent companies across 30 different industries. We have our presence across India, Dubai and Hong Kong. IFA Global MUMBAI 7th Floor, Sangita Ellipse Sahakar Road, Vile Parle (East) Mumbai Telephone: Website: research@ifaglobal.net AHMEDABAD India Forex Advisors Pvt. Ltd B, Synergy Corporate Road, Prahlad Nagar Ahmedabad IFA Global DMCC DUBAI Unit No: 3O Jewellery & Gemplex Plot No: DMCC-PH2-J&GPlex Jewellery & Gemplex Dubai UA E Telephone: IFA Global Advisors Ltd. HONG KONG 4210, Office Tower Convention Plaza, 1 Harbour Road Wan Chai, Hong Kong Telephone: BANGALORE India Forex Advisors Pvt. Ltd. 2nd Floor, Cears Plaza 136, Residency Road Bangalore NEW DELHI India Forex Advisors Pvt. Ltd. Tapasya Corporate Heights Ground Floor, Sector- 126 Noida Uttar Pradesh Disclaimer This report has been prepared by IFA Global. IFA Global shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. IFA Global nor any of directors, employees, agents or representatives shall be held liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. No liability whatsoever is accepted for any loss arising (whether direct or consequential) from any use of the information contained in this report. This statement, prepared specifically at the addressee(s) request is for information contained in this statement. All market prices, service taxes and other levies are subject to change without notice. Also the value, income, appreciation, returns, yield of any of the securities or any other financial instruments mentioned in this statement are based on current market conditions and as per the last details available with us and subject to change. The levels and bases of, and reliefs from, taxation can change. The securities / units / other instruments mentioned in this report may or may not be live at the time of statement generation. Please note, however, that some data has been derived from sources that we believe to be reliable but is not guaranteed. Please review this information for accuracy as IFA Global cannot be responsible for omitted or misstated data. IFA Global is not liable for any delay in the receipt of this statement. This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IFA Global to any registration or licensing requirements within such jurisdiction. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. IFA Global reserves the right to make modifications and alterations to this statement as may be required from time to time. However, IFA Global is under no obligation to update or keep the information current. Nevertheless, IFA Global is committed to providing independent and transparent information to its client and would be happy to provide any information in response to specific client queries. Neither IFA Global nor any of its directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. The information provided in these report remains, unless otherwise stated, the copyright of IFA Global. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright IFA Global and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders.