MORNING COFFEE 7-AUGUST-2017 FROM CEO'S DESK

Transcription

1 7-AUGUST-2017 FROM CEO'S DESK After strong headline July NFP print and slightly better Average hourly earnings on Friday, the US Dollar did get some respite though it has given off some of its strength. The Euro has recovered to 1.18 after touching lows of on Friday. The US 10y yield is currently trading 2.26% and DXY at Likely range for today Asian currencies trading slightly to the right. Asian stocks positive. No major data due today. US July CPI print due on Friday will be keenly watched. Also Fed member Dudley's speech post the latest NFP number will be followed. CURRENCY USDINR EURUSD GBPUSD USDJPY COMMENTS The Indian rupee opened lower against the dollar, tracking a recovery in the greenback on Friday following a more-than-expected rise in the US nonfarm payroll for July. Euro fell sharply upto on Friday after US nonfarm payroll employment increased by 209,000 in July, well above market expectations, and the unemployment rate was little changed at 4.3% Sterling fell on Friday and is poised to post its biggest two-day decline in seven weeks after a strong U.S. July payrolls report prompted investors to cut some of their heavy bets against the dollar Against the yen, the dollar gained as much as 0.9 percent to a one-week high of yen, rising off recent seven-week lows. Expected to hold in the near term. INTRADAY OUTLOOK BEARISH BEARISH BEARISH BEARISH COMMODITIES/DI GOLD SILVER WTI CRUDE DOLLAR INDEX INFLOWS ( ) EQUITY DEBT * Figures are in Rs. Crores LAST CHANGE % CHANGE REGION GLOBAL INDICES LAST CHANGE % CHANGE $1, % HANG SENG 27, % $ % ASIA KOSPI 2, % $ % NIKKEI 20, % % SENSEX 32, % INDIA NIFTY 10, % PURCHASE SELL NET CAC 5, % EUROPEAN DAX 12, % FTSE 7, % US DOW 22, % NASDAQ 5, %

2 COUNTRY TIME MAJOR GLOBAL EVENT ACTUAL FORECAST PREVIOUS IMPACT ON FX 4/8/2017 AUD 7:00 AM Retail Sales m/m 0.3% 0.2% 0.6% BULLISH CAD 6:00 PM Employment Change 10.9K 13.1K 45.3K BEARISH USD 6:00 PM Non-Farm Employment Change 209K 182K 222K BULLISH No Major Data 7/8/2017 CENTRAL BANKS INTEREST RATES LIBOR RATES ON 1M 3M 6M 1Y CENTRAL BANK RATES NEXT MEETING USD RBI 6.00% October 4, 2017 EUR FED 1.25% September 20, 2017 GBP ECB 0.00% September 7, 2017 JPY BOE BOJ RBA 0.25% -0.10% 1.50% September 14, 2017 September 21, 2017 September 5, 2017 INDIA'S KEY RATES CARRY 10 YEAR BOND YIELD LAST AGAINST USD REPO RATE 6.00% REVERSE REPO 5.75% TRADE INFLATION 1.54% CRR 4.00% INDIA 6.43% INR 5.00% GDP (Q/Q) 6.10% SLR 20.00% US 2.23% EUR 1.00% IIP 1.70% GBP 0.75% JPY -1.10% MONTH END FORWARD PREMIUM- IN RUPEES (BID RATE) MONTH 1M 2M 3M 6M 1Y 2Y 3Y 4Y 5Y 10Y USDINR EURINR GBPINR JPYINR

3 OTHER MAJOR NEWS * Dollar holds gains after U.S. jobs report, inflation data in focus * Oil holds near nine-week highs on jobs data, fall in U.S. drill rigs * Sterling set for biggest two-day fall in seven weeks CHART OF THE DAY - EURUSD SPOT RATE TECHNICAL OBSERVATION Technically,the pair has formed SHOOTING STAR candlestick pattern. However, last week low of is still holding. Closing below this will reverse the medium term trend. Otherwise, we could see trend to extend upto levels. INTRADAY RANGE [BEARISH] CURRENCY 3 MONTHS OUTLOOK 6 MONTHS OUTLOOK RANGE OUTLOOK RANGE OUTLOOK $ INDEX BEARISH BULLISH EURUSD BULLISH BEARISH GBPUSD BEARISH BEARISH USDJPY BEARISH BULLISH AUDUSD BULLISH BEARISH USDCAD BEARISH BEARISH

4 CURRENCY DAILY TECHNICAL CHART

5 MORNING COFFEE CURRENCY OPTION STRATEGY RECOMMENDED ON:- 04/08/2017 STRATEGY FOR: EXPORTER FORWARD RATE: (WHEN RECOMMENDED) SPOT RATE: (WHEN RECOMMENDED) STRATEGY It is recommended to sell Strike Call option at 12 paisa and buy Strike Put option at 15 paisa. Here, we are paying premium of 3 paisa. STRATEGY TABLE PAYOFF TABLE USD-INR Spot Market Price Net P/L Realization rate Sell Strike Buy Strike Net Premium payable PAYOFF CHART Market Price Realization rate CONCLUSION The USD-INR pair has given breakout on the lower range at which it was holding since last 2 months. Technically, USDINR pair is heading towards levels. We advice to buy vanilla OTM Put option to take advantage of downside market and simultaneously sell OTM Call option to reduce the premium outflow. Risk will start only if market crosses on upper side but probability is very low as market has resume its medium term downtrend. This strategy would be beneficial for exporters who don t want to book near term forwards at current levels but want to take advantage of appreciation in rupee.

6 For more details on articles and press clips visit The IFA Global IFA Global 9th Floor, 351 ICON Kanakia, Western Express Highway, Andheri (E), Mumbai Ph: research@ifaglobal.net 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.