Daily Market Report 08 th Feb 16

Transcription

1 [Type text] Daily Market Report 08 th Feb 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. Iran wants India to pay oil dues in euros Iran has asked Indian refiners such as Essar Oil and Mangalore Refinery and Petrochemicals Ltd (MRPL) to clear its past oil dues amounting to over $6 billion in euros within six months. With US lifting sanctions, Iran has told Indian authorities that the three-year old mechanism, paying 45% of oil import bill in rupees and keeping the remaining 55% pending for payment channels to clear, has come to an end. German factory orders contracted in December German factory orders contracted in December compared to growth in the previous month following a drop in exports. Contraction of 0.7% was more-than-estimate suggesting that a global trade slowdown may be restraining parts of Europe s largest economy. Number released from the ministry showed that domestic orders fell 2.5% while orders from the euro area slumped 6.9%. Today market participants will be keeping an eye on the German industrial production; expectation is that the sector could show growth in December compared to the previous supporting the euro lower levels. Non-farm payrolls disappoints in January In January the U.S. economy added 151,000 jobs in January compared to revised down figure of 262,000 jobs in the previous month. On the other hand unemployment fell to the lowest level in eight-year low. A jump in wage offered hope that expansion could be taking shape. Wages were up 2.5% from a year earlier, a pace that could reassure central bankers that overall inflation will return to a healthier pace with a tightening labor market. The greenback came under pressure against its major crosses after the release of the data. Indian 10 Year Bond Yield Indian bonds yields fell marginally after RBI announced an OMO purchase auction worth Rs. 10,000 crores in order to provide additional liquidity to the markets. The auction cutoffs would be keenly watched and will provide further direction to the market. Intraday range 7.77%-7.83%.

3 USD/INR Daily Chart Source: Reuters Overall Outlook & Strategy Trend: The USD/INR pair has revered after taking resistance at forming a double top on the daily charts. Exporters if uncovered are advised to cover partially at current levels of (They are suggested to discuss their positions with their respective advisors). Importers are advised to hold with a stoploss of for target of and below (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 rose to 3 month high of post the release of dismal NFP payroll data. But the risk sentiments quickly turned south as the finer details of the data emerged. The pair is expected to track the movement in dollar index for further cues. GBP / USD The British Pound continued to move down as the latest BoE policy weighed on the pair. The BoE MPC members unanimously voted 9-0 to keep the interest rates at the current level. This is in contrast to the last policy where one MPC member was in favor of rate hike. The pair will take further cues from movement in dollar index. AUD / USD The pair reversed from highs of after the NFP data gave new wind to the dollar index. The pair is likely to again take support near the crucial 0.70 handle. With the Chinese markets closed for the week on account of lunar new year, not much movement is expected in the pair. USD/ JPY The USD/JPY pair found fresh impetus after forming a double bottom of sorts at levels of The pair jumped on improved risk sentiments. The up move in the dollar index also helped the pair inch up. The pair will take further cues from the dollar index. Gold The yellow metal gained on the COMEX after payrolls data showed that the U.S. economy added less number of jobs in January compared to estimates suggesting that the economy is growing on a soft patch. Gold, on the COMEX, find resistance around $1180 levels and prices could retrace around this level. Crude WTI Crude oil inched higher in the early Asian session following thin trade as many Asian markets are shut on account of Lunar new year holidays. A meeting with OPEC producers Saudi Arabia and Venezuela during the weekend to discuss coordination on prices ended with few signs to boost prices.

5 Dollar Index The dollar rebounded against major crosses in the late hour of the session after nonfarm payrolls figure showed that the economy added less number jobs in January compared to the previous month. Today volatility for the greenback is expected to remain low with no major economic data expected to released from the U.S. Economic calendar for the week Date Event 08-Feb-Mon 09-Feb-Tue 10-Feb-Wed 10-Feb-Wed 11-Feb-Thu 12-Feb-Fri 12-Feb-Fri 12-Feb-Fri INR GDP y/y GBP Trade Balance GBP Industrial Output USD Fed chair Janet Yellen testimony USD Fed chair Janet Yellen testimony EUR Prelim GDP USD Retail Sales USD Prelim consumer sentiment

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