IFA GLOBAL RESEARCH DESK Blog: 06 February-2018

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1 06 February-2018

2 FROM CEO'S DESK The Dow Jones saw its worst fall in a day as the index tumbled 1175 points. It was down 1600pts at one point of time. Concerns over US Fed raising rates faster than expected has dampened sentiment and made Wall Street nervous. The yield on the 10y bond has fallen to 2.66% and Jpy has strengthened against crosses indicating risk aversion and pessimism. The negative sentiment has spilled over to Asian markets as well. The SGX Nifty is down 300pts. Asian stocks down 2-5%. Asian currencies trading about 0.5% weaker against USD. Likely range with up side bias. US raising rates faster than expected would be negative for Asia and EM assets. The bloodbath in domestic stocks, bonds and currency likely to continue today. If Rupee closes above it would be a technical breakout. FPIs invested net usd 114mn in debt and usd 201mn in equity on Friday. Importers were advised to start covering March exposure on every dips towards levels yesterday. Exporters are advised to cover partially at current levels. CURRENCY USDINR EURUSD GBPUSD USDJPY COMMENTS The rupee is seen trading under pressure on mild recovery in the dollar index backed by higher than expected US non-farm payroll numbers. All eyes on RBI meeting which is due tomorrow. ECB President Draghi mentioned yesterday that the eurozone is expanding robustly, with stronger growth rates than previously expected and euro s exchange rate & its effects would be monitored. The GBP/USD is trading on a weaker note below $ levels, after the UK services activity fell unexpectedly strongly in January and US ISM non-manufacturing index rose to 59.9 from 56.0 in Dec The USD/JPY pair found resistance at , failed to hold above and dropped to levels today. Risk aversion factor is currently favoring the yen against the greenback. INTRADAY OUTLOOK BULLISH BEARISH BEARISH BULLISH COMMODITIES/DI GOLD SILVER WTI CRUDE DOLLAR INDEX INFLOWS (05/02/2018) EQUITY DEBT TOTAL * Figures are in Rs. Crores LAST CHANGE % CHANGE REGION GLOBAL INDICES LAST CHANGE % CHANGE $1, % HANG SENG 30, % $ % ASIA KOSPI 2, % $ % NIKKEI 21, % % SENSEX 33, % INDIA NIFTY 10, % PURCHASE SELL NET CAC 5, % EUROPEAN DAX 12, % FTSE 7, % DOW 24, % US NASDAQ 6, %

3 COUNTRY TIME (IST) MAJOR GLOBAL EVENT ACTUAL FORECAST PREVIOUS IMPACT ON FX 2/5/2018 GBP 3.00 PM Services PMI BEARISH USD 8.30 PM ISM Non-Manufacturing PMI BULLISH EUR 9.30 PM ECB President Draghi Speaks MIXED 2/6/2018 AUD 9.00 AM Cash Rate 1.50% 1.50% 1.50% MIXED CAD 7.00 PM Trade balance -2.3 B -2.5 B CENTRAL BANKS INTEREST RATES LIBOR RATES ON 1M 3M 6M 1Y CENTRAL BANK RATES NEXT MEETING USD RBI 6.00% February 7, 2018 EUR FED 1.50% March 21, 2018 GBP ECB 0.00% March 8, 2018 JPY BOE BOJ RBA 0.50% -0.10% 1.50% February 8, 2018 March 8, 2018 February 6, 2018 INDIA'S KEY RATES 10 YEAR LAST CARRY AGAINST USD REPO RATE 6.00% REVERSE REPO 5.75% TRADE INFLATION 5.21% CRR 4.00% INDIA 7.61% INR 4.50% GDP (Q/Q) 6.30% SLR 19.50% US 2.68% EUR 1.50% IIP 8.40% GBP 1.00% JPY -1.60%

4 OTHER MAJOR NEWS * Oil prices sink more than 1 percent amid global market plunge, U.S. output spree * Reserve Bank of Australia holds interest rates at 1.5% * India to bar cryptocurrencies from its payments system: finance ministry official CHART OF THE DAY - AUDUSD SPOT RATE TECHNICAL OBSERVATION AUDUSD is currently trading undercorrection mode from last few days on the downside can be seen in the near term which is the 50% fibonacci retracement level. Immediate resistance stands near Intraday view remains bearish for the pair. CURRENCY SHORT TERM MEDIUM TERM OUTLOOK (3 MONTHS) (6 MONTHS) OUTLOOK USDINR SLIGHT BULLISH BEARISH $ INDEX BEARISH BEARISH EURUSD BULLISH BULLISH GBPUSD BULLISH BULLISH USDJPY BEARISH BEARISH AUDUSD BULLISH BULLISH USDCAD BEARISH BEARISH GOLD $1300-$1420 BULLISH $ $1470 BULLISH

5 CURRENCY TECHNICAL CHART

6 CURRENCY OPTION STRATEGIES:-

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