SYSTEMATIX SHARES AND STOCKS (INDIA) LIMITED PCG Research

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1 SYSTEMATIX SHARES AND STOCKS (INDIA) LIMITED PCG Research Daily Forex Report as on Wednesday, August 01, 2018 Emerging Markets Indices Close % Chg. BSE SENSEX S&P CNX Nifty Bovespa (Brazil) Asian Markets Nikkei Hang Seng Strait Times US Markets Dow Jones Nasdaq S&P European Markets CAC DAX FTSE Profit growth for China s industrial firms eased in June from the previous month, data showed, as factory production slowed amid the worsening trade U.S. dispute and Beijing s efforts to cut pollution and debt. Industrial profits rose 20 percent to billion yuan ($96.69 billion) in June, according to data published by the National Bureau of Statistics (NBS) on Friday, compared with a 21.1 percent rise in May. NBS said in a separate statement on the data rising prices have cushioned firms profits even as industrial production slowed in June. It did not provide separate reasons for the slower profit growth in the month. Steel, building materials and oil extraction sectors were key drivers behind profit growth in the first half of the year, it added. But profit growth in textile, non-ferrous metal smelting and processing, and telecommunications and electronic equipment manufacturing profits fell during the same period from a year earlier. For the first half of the year, industrial firms profit grew 17.2 percent from a year earlier to 3.39 trillion yuan, accelerating from a 16.5 percent rise for January-May. China s economic growth slowed in the April-June period from the previous quarter while June s industrial output growth slumped to a four-year low, raising concerns about the outlook for the world s second-largest economy amid growing signs of stress. The Bank of England looks set to pass a post-financial crisis milestone next week by finally raising interest rates above their emergency levels set more than nine years ago. But with a potentially messy Brexit nearing, Governor Mark Carney may sound cautious about the pace of further moves away from the BoE s still-powerful stimulus program. In March 2009, when the financial crisis was raging, the BoE slashed its benchmark rate to 0.5 percent to stave off the risk of a depression. Bank Rate has sat there since, apart from a 15-month period after the shock referendum vote in 2016 for Britain to leave the European Union, when it was cut again to 0.25 percent - the lowest in the three-century history of the central bank. Now, Carney and his colleagues are expected to nudge rates up to 0.75 percent on Aug. 2, going beyond last November s increase back up to 0.5 percent. However, taking rates above their crisis levels will not be a vote of confidence in the world s fifth-biggest economy. Britain has gone from having the strongest growth of the Group of Seven rich nations to being one of the slowest after the Brexit decision. Trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) 31/07/2018 Buy Value Sell Value Net Value FII's 5, , DII's 4, , Source - NSE Eurozone lenders expect credit standards to ease in all loan categories in the third quarter, bank lending survey data from the European Central Bank showed. Due to narrowing of margins on average loans, banks' terms and conditions on new loans eased across three segments in the second quarter. Lenders expect net easing of credit standards to ease further in the third quarter. The survey showed that demand for loans from enterprises increased in the second quarter, driven by the general level of interest rates, inventories and working capital, and M&A activity. At the same time, increase in demand for housing loans was underpinned by low interest rates, favorable housing market prospects and consumer confidence. Consumer confidence, spending on durable goods and the low general level of interest rates continued to contribute positively to net demand for consumer credit and other lending to households. Further, the survey showed that tightening impact on credit standards from banks' non-performing loans is diminishing. The survey was conducted among 149 banks between June 18 and July 3.

2 Currency Table Product Exp. Date Open High Low Close % Change O.Int % Cng OI Volume ATP USD-INR Aug EUR-INR Aug GBP-INR Aug JPY-INR Aug MAJOR CURRENCY CROSS RATES Last Trade INR U.S. $ Euro U.K. en RBI Reference Rate 1 INR = Date Last Previous 1 U.S. $ = USD Euro = EURO U.K. = YEN en = GBP Market Update ECONOMICAL DATA Market Update Spanish Manufacturing PMI Name Rate % Change Name Rate % Change EURUSD Italian Manufacturing PMI GOLD GBPUSD French Final Manufacturing PMI SILVER USDJPY German Final Manufacturing PMI CRUDE EURGBP Final Manufacturing PMI NAT.GAS EURJPY ADP Non-Farm Employment Change COPPER GBPJPY Final Manufacturing PMI ZINC AUDINR ISM Manufacturing PMI NICKEL USDMYR Construction Spending m/m ALUMINIUM SPREAD MATRIX FOR USDINR SPREAD MATRIX FOR EURINR MONTH RATE AUG SEP OCT MONTH RATE AUG SEP OCT AUG AUG SEP SEP OCT OCT SPREAD MATRIX FOR GBPINR SPREAD MATRIX FOR JPYINR MONTH RATE AUG SEP OCT MONTH RATE AUG SEP OCT AUG AUG SEP SEP OCT OCT

3 USD - INR OPEN HIGH LOW CLOSE % CNG RS. CNG VOLUME OPEN INT PIVOT POINT TECHNICAL OUTLOOK USD - INR Rupee remained supported amid selling by foreign banks tracking a weakness in greenback. The Indian government sought parliament approval for a gross billion rupees ($1.7 billion) in extra spending, which includes capital infusion in national carrier Air India, in the current fiscal year. In a statement tabled in the lower house of parliament, the government said net extra spending will only be billion rupees ($ million), as the remainder would be funded from savings. The Federal Reserve is expected to keep interest rates unchanged but solid economic growth combined with rising inflation are likely keep it on track for another two hikes this year even as President Donald Trump has ramped up criticism of its push to raise rates. The U.S. central bank so far this year has increased borrowing costs in March and June, and investors see additional moves in September and December. Policymakers have raised rates seven times since December The U.S. economy grew at its fastest pace in nearly four years in the second quarter as consumers boosted spending and farmers rushed shipments of soybeans to China to beat retaliatory trade tariffs, Commerce Department data showed. The Fed's preferred measure of inflation increased at a 2.0 percent pace in the second quarter, the data also showed. Economic growth has been buoyed by the Trump administration's package of tax cuts and government spending, and Fed Chairman Jerome Powell has said overall the economy is in a "really good place." Technically now USDINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at , a move above could see prices testing SELL USDINR AUG SL TGT NSE

4 EURO - INR OPEN HIGH LOW CLOSE % CNG 0.31 RS. CNG 0.25 VOLUME OPEN INT PIVOT POINT OUTLOOK EURO - INR Euro pushed higher as investors awaited reports on growth and inflation in the euro area. The European Central Bank left its interest rates unchanged and maintained the forward guidance on monetary stimulus, following the Governing Council's June decision to halve the monthly asset purchases after September, and to eventually end them in December. The main refi rate is currently at a record low zero percent and the deposit rate at percent. The marginal lending facility rate is 0.25 percent. Euro zone economic sentiment edged lower in July, pulled down by less optimism in industry and the retail sectors, despite a better mood in services, a monthly survey by the European Commission showed. The Commission survey showed the economic sentiment indictor for the 19 countries sharing the euro currency eased to points in July form in June, continuing a downward trend started since a peak of last December. Separately, the Commission s business climate indictor, which helps identify the phase of the business cycle, fell to 1.29 in July from 1.38 in June, following a similar downward path as economic sentiment since a peak of 1.63 in January. The easing of sentiment in July was mainly due to a fall in the indicator for industry which decreased to 5.8 from 6.9, because managers were more pessimistic on production expectations, the current level of overall order books and stocks of finished products. Technically now EURINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at 80.87, a move above could see prices testing SELL EURINR AUG SL TGT NSE

5 GBP - INR OPEN HIGH LOW CLOSE % CNG 0.21 RS. CNG 0.19 VOLUME OPEN INT PIVOT POINT OUTLOOK GBP - INR GBP traded in range amid concern among investors about the currency s prospects before a widely anticipated Bank of England interest rate hike this week. The Bank of England (BoE) looks set to pass a post-financial crisis milestone on Thursday by finally raising interest rates above their emergency levels set more than nine years ago. In normal circumstances, monetary tightening might strengthen the pound significantly, but with a potentially messy Brexit nearing, the BoE may sound cautious about the pace of further moves away from it stimulus programme. With just over eight months left until Britain is due to leave the European Union, there is little clarity about how trade will flow, as Prime Minister Theresa May tries to strike a deal with the bloc. Brexit uncertainty and soft wages data has prompted analysts to push back their expectations for the next rate hike, with Goldman Sachs predicting the next increase only in the second quarter of European Union Brexit negotiator Michel Barnier rejected key elements of Britain s new trade proposals on Thursday. Markets are perturbed by the prospect of Britain crashing out of Europe without a trade deal and being left isolated. Consumer confidence in the United Kingdom weakened further in July, the latest survey from GfK revealed with an index score of -10. Technically now GBPINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at , a move above could see prices testing SELL GBPINR AUG SL TGT NSE

6 JPY - INR OPEN HIGH LOW CLOSE % CNG RS. CNG VOLUME OPEN INT PIVOT POINT OUTLOOK JPY - INR JPY seesawed after the Bank of Japan made small tweaks to its policy rather than more drastic changes that some traders had expected. The BOJ pledged to maintain its short-term interest rate target at minus 0.1 percent and decided to guide 10-year JGB yields around zero percent. But the bank also said it would allow long-term rates to fluctuate depending on economic and price developments, and conduct its bond purchases more flexibly. Japan s jobless rate rose in June while the availability of jobs improved to the highest in more than four decades, figures from the Internal Affairs ministry showed. The seasonally adjusted unemployment rate rose to 2.4 percent from 2.2 percent in June, and compared with median forecast of 2.3 percent. The jobs-to-applicants ratio rose to 1.62 from 1.60 in June to reach the highest since January The Bank of Japan pledged to keep interest rates very low for the time being and took measures to make its massive stimulus programme more flexible, reflecting its forecast that it would take time for inflation to hit its 2 percent target. The BOJ decided to maintain the short-term interest rate target at minus 0.1 percent and a pledge to guide 10-year government bond yields around zero percent by a 7-2 vote. Technically now JPYINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at , a move above could see prices testing SELL JPYINR AUG SL TGT NSE

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