Daily Market Report 2 nd Sep 15

Transcription

1 [Type text] Daily Market Report 2 nd Sep 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. No MAT on FIIs/FPIs prior to April 1, 2015 The Government will amend the Finance Act, 2015 to change the Income Tax Act for ensuring Minimum Alternate Tax (MAT) is not applicable on foreign institutional investors and foreign portfolio investors on transactions prior to April 1, Till the amendment is brought about, the tax department will issue a circular to field formations for holding back action on notices issued for levy of MAT on FIIs and FPIs on transactions prior to April 1, Further, those who have deposited the money will get a refund under the existing tax regulations.. 22% monsoon deficit in August, third driest since 1993 August ended with a higher-than-anticipated rainfall deficit of 22% and with top India Meteorological Department officials saying the monsoon could start withdrawing in the next few days, the chances of a second successive drought year in the country appear high. IMD said the all India weighted average rainfall in August was 204.2mm against a normal of 261mm, making it the third lowest August rainfall in more than two decades. Since 1993, monsoon in August has been weaker only in US PMI Miss the Estimates The US dollar eases as ISM manufacturing PMI numbers, which released at 51.5 levels, missed the estimates second straight month. A weak reading on ISM manufacturing PMI numbers might create a doubt in US FED, who has linked the rate directly to the quality of economic data. Going forward, the US dollar will take further cues from non-farm payroll numbers, scheduled to release later during the day. Indian 10 Year Bond Yield India's 10 year bond yield opened the session on a strong note at % levels against previous close of 7.75% levels. Bond yield eased as crude oil fell by more than 6% in single trading session. Intra-day range is seen between 7.74%-7.76% levels.

3 USD/INR Daily Chart Source: Reuters Technical Outlook The USD/INR pair has taken the resistance of levels, which is raising top to top trend-line. Overall Outlook & Strategy Trend: The USD/INR pair has shown some sign of reversal after taking resistance at the top to top rising trendline which is at levels. Exporters were advised to cover for long term as the stoploss of got triggered. (They are suggested to discuss their positions with their respective advisors). Importers are advised to cover on dips around levels of for the near term. (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 EUR/USD pair, which spiked above handle after weak ISM manufacturing PMI, could not sustain early gains. The EUR/USD pair will remain sensitive to the development in emerging markets, especially China. GBP / USD The GBP/USD pair continued to witness free-fall as UK s manufacturing PMI numbers failed to meet estimates. Going forward GBP/USD pair will take further cues from UK s construction PMI numbers, scheduled to release later during the day. AUD / USD The AUD/USD pair fell to its fresh six year low levels amid continued weakness in Chinese economy. The AUD/USD pair came under further pressure as Crude oil price fell nearly 6% in single trading session. USD/ JPY The USD/JPY pair, which fell towards levels on heavy equity selling, recovered moderately. The USD/JPY pair will take further cues from movement in US dollar index amid lack of economic data from Japanese economy. Gold The Gold prices were higher on the London spot market Tuesday, as the potential timing of an impending U.S. interest rate raise continued to move into the long grass. Gold has an easier time competing with assets that bear interest, like Treasurys, when rates are kept near zero. Additionally, a rate rise would likely strengthen the dollar, which is bad news for gold as it grows more expensive to buy for those holding other currencies. Crude WTI U.S. crude Oil prices dropped Tuesday, giving up most of Monday s strong gains, as worries resurfaced about China s economy and a seasonal decline in U.S. demand. The current oil market is the most volatile in years. The U.S. benchmark posted a move of more than 6% for the fourth straight trading day on Tuesday, the longest such streak since January 1991

5 Dollar Index The US dollar remained under pressure as ISM manufacturing PMI missed the estimates. The US dollar index will take further cues from ADP non-farm payroll numbers, scheduled to release later during the day. Economic Calendar Date 01-Sep-Tue 01-Sep-Tue 01-Sep-Tue 02-Sep-Wed 02-Sep-Wed 02-Sep-Wed 03-Sep-Thu 04-Sep-Fri 04-Sep-Fri Description CNY - Manufacturing PMI GBP - Manufacturing PMI USD - ISM Manufacturing PMI AUD - GDP q/q GBP - Construction PMI USD - ADP Non-Farm Employment Change USD - Trade Balance USD - Non-Farm Employment Change USD - Unemployment Rate

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