Daily Market Report 10 th Sep 15

Transcription

1 [Type text] Daily Market Report 10 th Sep 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. S&P Downgrades Brazil to Junk Status Standard & Poor's downgraded Brazil's credit rating to BB+ (Highest Junk status) from BBB-. The rating downgraded has been done on the back-ground of highly volatile equity markets, continued weakness in currency and incompetent political authorities. The rating downgrade is likely to hit the investor's sentiments, who have been uncertain about to economic stability. The global equity markets, which witnessed swift relief rally in last two days, witnessed free-fall as Nifty index falling by more than 100 points in early trades. Indirect tax collections surge 36.5% in Apr-Aug Indirect tax collection maintained its bumper pace in August, supporting the view that the economy can do better than the below expectation 7% growth recorded in the first quarter of the current fiscal. Last month's indirect tax collection rose 36.7% from a year ago to Rs 54,396 crore, taking the overall figure for April-August to Rs 2.63 lakh crore. Indirect tax collections are considered a good measure of the underlying demand in the economy. India's economy grew 7% in the April-June quarter compared with 7.5% in the previous quarter. Chinese Inflation picks up in August; PPI disappoints Chinese price pressures picked up in August, with consumer prices rising at the fastest pace since August 2014, however, the factory gate prices fell at the quickest pace in six years last month. According to the National Bureau of Statistics (NBS), China's CPI rose 2.0% y/y in August, the fastest pace in a year, and beating the market forecast of a 1.9% rise. Indian 10 Year Bond Yield Indian bonds opened on a weaker note with yields spiking by 1-2 bps across maturities as global markets toiled after S&P's surprise downgrade of Brazil. Bond prices also fell tracking the movement in rupee. The weekly G-sec auction on Friday is also likely to keep the bonds under pressure. Intraday range likely between 7.74%-7.79%.

3 USD/INR Daily Chart Source: Reuters Technical Outlook The USD/INR pair has taken the resistance of levels, which is raising top to top trend-line. Overall Outlook & Strategy Trend: The USD/INR pair is trading near the crucial resistance of which is the top to top rising trend-line resistance. Exporters are advised to hold with a stop-loss of for target of and above. (They are suggested to discuss their positions with their respective advisors). Importers are advised to cover on dips around levels of 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 above 1.12 handle amid the risk-aversion in financial markets, which witnessed sharp decline as S&P downgraded Brazil to junk status. GBP / USD The GBP/USD pair remained broadly unchanged after the release of weak manufacturing production data. Going forward, the GBP/USD pair will take further cues from BoE s monetary policy statement. AUD / USD The AUD/USD pair bounced back from lows after upbeat employment numbers. The unemployment rate came in at 6.2%, which was as expected, but the pair rallied as sentiments were markedly negative going into the data. USD/ JPY The USD/JPY pair fell after coming near touching distance of 121 handle as risk aversion rose following the downgrade of Brazil s credit Rating by S&P. The safe haven demand rose even further after disappointing Japanese data. Gold Gold languished near a four-week low on Thursday, retaining sharp overnight losses, as strong U.S. economic data and outflows from bullion-backed exchange traded funds sapped investor interest. Gold languished near a four-week low on Thursday, retaining sharp overnight losses, as strong U.S. economic data and outflows from bullion-backed exchange traded funds sapped investor interest. Crude WTI Crude Oil prices also fell amid the surplus output from the Organization of Petroleum Exporting Countries (OPEC). For the week ended August 28, the US crude supplies climbed 4.7 million barrels to million, 95.9 million barrels more than one year before, according to EIA's weekly report

5 Dollar Index The US dollar index was seen trading in a narrow range despite the heavy volatility in equity and debt markets. The US dollar index will take further cues from US unemployment claims, scheduled to release later during the day. Economic Calendar Date 08-Sep-Tue 08-Sep-Tue 08-Sep-Tue 09-Sep-Wed 10-Sep-Thu 10-Sep-Thu 10-Sep-Thu 11-Sep-Fri 11-Sep-Fri Description CNY Trade Balance JPY Final GDP AUD NAB Business Confidence GBP Manufacturing Production AUD Unemployment Rate GBP Official Bank Rate USD Unemployment Claims USD PPI m/m USD Prelim Consumer Sentiment

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