Daily Market Report 29 th June 16

Transcription

1 [Type text] Daily Market Report 29 th June 16 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. David Cameron addresses Parliament after Brexit In its first appearance to the parliament after the Brexit vote Prime Minister, David Cameron, made a statement to the House of Commons on the consequences of Britain leaving the European Union. David Cameron was in favor of remaining in the European Union and announced that his government would begin taking steps to leave the EU. Later in the evening credit rating agency S&P downgraded UK s credit rating from AAA to AA and warned of the economic, fiscal and constitutional risk that the country faces as a result of EU referendum result. Japan s PM tell its Fin min to take needed steps Yesterday Japan s PM Shinzo Abe instructed its finance minister to take necessary steps and was asked to watch currency markets more closely in the wake of Britain s historic vote to leave the European Union. Market participants are of the view that the Bank of Japan could call for an extra policy meeting (or an emergency policy meeting) to take steps to curb the volatility in FX markets. Decision over further easing steps could also be taken by the officials if the turmoil in the market continues. U.S. Sees Wider Trade Deficit in May Yesterday, US Goods trade balance continued to show deficit; trade deficit for May is at $60.6bn compared to deficit of $57.53bn in the previous month. Exports were down by 0.2%, after a decline in exports of cars and auto-related products and from weaker exports of capital goods. Imports were up by 1.6%, which threw the trade deficit out of balance versus trends and expectations. Imports of consumer goods were said to be strong, which might point to stronger business and consumer confidence. Bonds Indian government bonds continue to move higher on prospects of delayed Fed rate hike and on hopes of liquidity and monetary easing steps by RBI after Brexit. Benchmark note at INR highest since May 12, against INR previous close. 10-year US treasury at 1.47%; benchmark brent crude lower at $47.79 per barrel Indian benchmark yield pegged in the range of % band today.

3 USD/INR 4 Hourly Chart Source: Reuters Overall Outlook & Strategy Outlook Intraday Trend: The USD/INR pair is likely to quote in the range of levels. Exporters were advised to partially cover their long term exports on Friday and maintain strict stoploss below levels on daily basis. Break below could take it towards levels, from where a rebound can be expected. (They are suggested to discuss their positions with their respective advisors). Importers are advised to book their short term imports around levels and wait for long term imports. (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 Yesterday, EURUSD pair failed to sustain above 1.11 levels and corrected back till levels. Moreover, concerns surrounding the Brexit issue continue to weigh on the EUR/USD pair. In the day ahead, focus will remain on the EU Summit for fresh Brexit-related developments. Technically, the pair is expected to trade in the range of band. (Intraday) Support: , Resistance: , Outlook: Slightly Bearish GBP / USD Yesterday, pound marked one positive day after Brexit. However, the major came under renewed selling pressure in the last session after the greenback recovered ground on the release of upbeat US GDP and consumer confidence data. Technically, the pair is expected to remain under pressure as it is facing resistance near zone. (Intraday) Support: , Resistance: , Outlook: Slightly Bearish USD/ JPY Today, the yen gained further on in early Asian trading session as top policymakers in Japan prepared for another set of meetings on the economy in the wake of the Brexit vote in the U.K. In Japan, retail sales for May fell 1.9% year-on-year, compared to a 1.6% fall seen. Technically, the pair is likely to trade on positive note; in range of (Intraday)Support: , Resistance: ; Outlook: Slightly Bullish USD/CAD The Canadian dollar has found some stability after the Brexit voter outcome trigged a wave of risk aversion in global markets in the previous week. The loonie continues to lower to the USD as the latter has benefited from safe haven inflows. Oil prices have offered no support to the CAD, and a possible oil strike in Norway has kept the price at current levels despite global market instability. Technically, the pair needs to cross immediate resistance of 1.31 to gain further However, failures to do, would take prices lower towards levels. (Intraday)Support: , Resistance: ; Outlook: Slightly Bearish

5 AUD / USD Yesterday, AUDUSD bounced back and closed on positive note after two days of fall. However, HIA New Home Sales decline for second consecutive month. Also the upside seems capped as the greenback remains on the front foot against its major peers after better-than expected US GDP and consumer confidence data released. Technically, and could act as an immediate resistance and support levels respectively. Either side of the break would provide the direction of near term. (Intraday)Support: , Resistance: , Outlook: Slightly Bearish Gold Gold in the intraday session has moved higher after consolidating in the last couple of session, strength in the yellow metal has been on back of weaker dollar against its major crosses. Instability across global markets has kept gold prices stable at higher levels. Overall, gold in today s session is expected to trade in the range of $1,305 and $1,340. (Intraday)Support: $1305, Resistance: $1340; Outlook: Slightly Bearish Crude WTI After falling for three successive session crude rose yesterday on back of potential strike in Norway and crisis in Venezuela threatened to cut supply. On the supply side, a looming strike by Norwegian oil workers threatened to cut output from the biggest North Sea producer. In the next couple of session we expect crude to trade with a slight positive bias and on the higher side could test levels of $50. (Intraday)Support: $47.60, Resistance: $48.70; Outlook: Slightly Bullish Dollar Index The dollar against its major crosses fell despite better-than-expected GDP number; the bias for the greenback has turned positive after the Britain voted to leave the EU. For the day, market participants will be keeping an eye on the personal spending and pending home sales number to gauge a view for the dollar.(intraday)support: 95.80, Resistance: 96.50; Outlook: Slightly Bullish Economic calendar for the day Time (IST) Currency Event Previous Forecast DAY2 EUR EU Economic Summit 18:00 USD Personal Spending m/m 0.4% 1.0% 19:30 USD Pending Home Sales m/m -0.9% 5.1% 20:00 USD Crude Oil Inventories -2.3M -0.9M

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