Daily Market Report 4 th Sep 15

Transcription

1 [Type text] Daily Market Report 4 th 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. India to take up currency devaluation issue at G20 The recent shocks in the global economy triggered by the Chinese devaluation of yuan and its economic slowdown are likely to dominate discussions in the two-day meeting of G20 Finance Ministers and Central Bank Governors. Currency devaluations at a time when the global demand is sluggish is a major threat to stability in the global economy. It said the attempt here would be to analyse the situation and consider collaborative measures like developing the global safety nets to protect countries from negative spillovers. European Markets Celebrates Draghi's Birthday ECB Governor, Mario Draghi, who celebrated his 68th birthday, has hinted an increase in existing quantitative easing programme of 60 bn per month to support the European economy. The ECB has reduced its long term growth and inflation forecast and raised the downside risk on inflation. The equity markets cheered the news with DAX rising by nearly 2% during the session. On the other hand, the EUR/USD pair, which spiked to 1.17 levels last month, witnessed heavy selling as pair tested the key levels of Government to invest Rs 8.5 lakh crore in railways Sharpening focus on infrastructure development to boost growth, government will invest Rs 8.5 lakh crore in Indian Railways to change the face of the sector Minister of State for Finance Jayant Sinha said. He also appealed to the opposition parties to help pass the GST bill that will usher in a new indirect taxes regime in the country, boosting business activity. After a decade of chronic under investment in Indian Railways we have decided we will invest Rs 8.5 lakh crore in Indian railways alone. This is extraordinary and will change the face of railways in India. Also, investment in roads has been doubled this year. Indian 10 Year Bond Yield India's 10 year bond yield opened the session on a flat note despite the sharp decline in equity markets. The inherent strength in government bond can be attributed be consistent weakness in crude oil prices, which continued to trade below $50 levels. Intraday range in seen between 7.74%-7.77% 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 Worried about uptick in EUR/USD pair, which spiked to 1.17 levels, ECB has hinted on increase in monetary stimulus programme. ECB has also reduced the growth and inflation forecast citing downside risk. The EUR/USD pair fell nearly 150 bps after announcement before taking support near levels. GBP / USD The GBP/USD pair continued to witness free-fall as UK s service PMI missed the estimates. Service PMI released at levels against the previous reading of 57.4 levels. Going forward, the GBP/USD pair will take further cues from movement in US dollar index. AUD / USD The AUD/USD pair, which is trading near its 6 year low levels, broke the crucial support of levels. Australian dollar will remain sensitive to the movement crude oil and other commodity prices. USD/ JPY The USD/JPY pair continued to fall in second straight session amid risk off sentiment in global financial markets. The Japanese Yen, which is seen a safe haven asset, should remain sensitive to development in emerging markets. Gold The Gold held declines from a two-day losing streak on Friday, ahead of a crucial U.S. jobs report as traders waited for clues about the timing of a Federal Reserve rate hike. Crude WTI Oil futures settled higher Thursday, buoyed by a weekly decline in oil production and expectations for further stimulus measures by the European Central Bank, which could lift energy demand. A rally in the stock market also helped to improve the energy-demand outlook, but oil prices trimmed gains as equities lost steam and the U.S. dollar continued to strengthen

5 Dollar Index The US dollar index, which is all set to gain in second straight week, will take further cues from non-farm payroll numbers, scheduled to release later during the day. A reading above 210K levels will give enough room to US FED to hike rates. 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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