Daily Market Report 7 th Oct 15

Transcription

1 [Type text] Daily Market Report 7 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. Bank of Japan Keeps Monetary Policy Stance Unchanged Bank of Japan has kept its monetary policy stance unchanged as it will continue to buy asset worth 80 trillion yen per year. The policy statement underlined weak consumer price inflation, which is expected to remain near zero levels, in Japanese economy. While the BoJ remained confident about domestic economic outlook, it raise the concerns of weak growth in emerging markets. The weaknesses in emerging markets have negative impacts on Japanese exports. RBI notifies hike in FPI limits for G-Secs The Reserve Bank of India notified on Tuesday that foreign portfolio investors (FPI) will be able to hold up to R1.66 lakh crore worth of government securities from October 12 onwards, an increase of Rs 13,000 crore from the current limit of Rs 1.53 lakh crore. Over the next two-and- a half years, FPI investment limits into government bonds and SDLs will be close to double the current figure of $30 billion allowed in government bonds, given that the RBI has said it would increase the limits in phases and has allowed investors to buy SDLs. Indonesian Rupiah Jumps the most in the last three sessions; Central bank intervention rumored Indonesian Rupiah which weakened to its pre levels, recovered sharply. The USD/IDR pair tumbled nearly 5% from its peak levels in the last three trading sessions as central bank intervened heavily to stem the currency depreciation. The recovery in Indonesian Rupiah was further supported by delay in US interest rate hike. Indian 10 Year Bond Yield Indian bonds opened on a weaker note, with yields spiking by 1-2 bps across yield curve. The bond markets encountered profit booking post the announcement of increase in FPI limits by RBI. Although, this is a good news for the bond markets, the prices reacted negatively as market participants were expecting a much bigger increase in limits. The spike in the crude oil prices further dented the sentiments. Intraday range is seen between 7.52%-7.57%.

3 USD/INR Daily Chart Source: Reuters Technical Outlook The USD/INR pair has taken support near levels, which is 50% Fibonacci retracement support on the upside, USD/INR pair has immediate resistance at levels. Overall Outlook & Strategy Trend: The USD/INR pair has shown some strength near levels which is the 50% Fibonacci Retracement. Resistance on the upside is at and levels. 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 partially at current levels and hold with Stop loss of levels for further covers. (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 Euro spiked up yesterday, being the biggest gainer of the increase in the risk appetite in the global markets post the dismal NFP data. The pair was also supported by the widening US trade deficit. GBP / USD The GBP/USD pair recovered towards post the release of US trade deficit. The pair is taking resistance at key Fibonacci level of The pair will be further driven by UK s manufacturing & industrial production data due today. AUD / USD The Australian dollar continued to gain for third straight session as Reserve Bank of Australia retained its confidence in economy to fight with unfavourable global conditions. The gains in AUD/USD pair were further supported by spike in crude oil prices. USD/ JPY The Japanese Yen continued to trade in tight range against its US counter-part as BoJ s monetary policy meet turned out to be a non event for the markets. The Bank of Japan has kept its ultra-eased monetary policy stance unchanged to support the economy. Gold Gold held just below a one-week high on Tuesday as investors bet sluggish U.S. nonfarm payrolls data would deter the Federal Reserve from hiking rates this year, although some cautioned that profit taking could hurt the metal in the near term. Non-interest-paying gold had benefited from ultra-low U.S. rates. Crude WTI Crude oil prices rose more than 2% yesterday, bolstered by a rally in US petrol and Russia s willingness to meet other major oil producers to discuss the market. Higher stock prices on Wall Street and a softer dollar provided further support to oil and other dollar-denominated commodities.

5 Dollar Index The US dollar index could not sustain its previous gains above handle levels. Going forward, the US dollar index will take further cues from economic data from other economies as US economic calendar will remain muted. Economic Calendar Date 05-Oct-Mon 05-Oct-Mon 06-Oct-Tue 06-Oct-Tue 06-Oct-Tue 07-Oct-Wed 07-Oct-Wed 08-Oct-Thu 08-Oct-Thu Description GBP Service PMI USD ISM Non-Manufacturing PMI AUD - Trade Balance AUD Rate Statement EUR Draghi Speech JPY BoJ Monetary Policy Statement GBP Manufacturing Production GBP BoE Monetary Policy USD FED Meeting Minutes

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