Weekly Report 17 th July 15

Transcription

1 Weekly Report 17 th July 15 Research Team IFA Global

2 The Week That Was!!! Globally, the Greece drama ended on positive note as Greek prime-minister Alexis Tsipras accepted the deal, which will ensure strict fiscal discipline and major pension and financial sector reforms. A close look at deal terms indicates that current deal is even harsher than the deal presented on 29th June Hence Alexis Tsipras has lost the negotiation despite winning the referendum by significant margins. On one hand, the equity markets rejoiced the deal with DAX rising by more than 3% in current week. On the other hand, the currency markets witnessed heavy selling in EUR/USD pair, which fell to its two month low levels. The EUR/USD pair recovered slightly after ECB monetary policy meet, wherein Mario Draghi praised the economic progress in Euro-Zone. The currency market participants again showed they are more receptive to views of BoE governor, Mark Carney than the UK economic data. The GBP/USD pair surged to above levels as Mark Carney suggested that BoE is moving closer towards an interest rate hike. The pound ignored weak unemployment and CPI inflation numbers. The unemployment rate spiked to 5.6% raising concerns of weak economic recovery. The Bank of Japan has reduced the growth forecast, while keeping its monetary policy stance unchanged. A downward revision in growth outlook leads to sharp depreciation in Japanese Yen against the major currency pairs. On domestic front, the equity markets were buoyed by Greece deal and Chinese equity recovery, while ignoring weak IIP and manufacturing production numbers. India s May IIP number came in at 2.7% against the April reading of 3.36%. The Nifty index surged nearly 3% before closing above 8600 levels. On other hand, the bond yield reacted adversely to spike in June CPI inflation, which came in at 5.40% levels against the May reading of 5.01%. The latest spike in CPI inflation reinforces our view that RBI will not cut interest rate in August 3 meeting. The Week Ahead Globally, economic calendar of major economies will remain muted, which might lead a dull week for currency markets. The US dollar index, which gained despite the weak retail sales and manufacturing data, is expected to continue its positive momentum. The US FED Chairperson, Ms. Janet Yellen has maintained the US interest rate hike will be dependent on quality of economic data. The news flow from Greece will step aside for economic data from EURO Zone, which will become major driver for movement in Euro. The Australian dollar, which is trading near its six year low levels against greenback, will take further cues from RBA s minutes of meeting. The Reserve Bank of Australia had kept its monetary policy stance unchanged despite the broad weakness in Australian economy. The Australian economy has been struggling due to sharp decline in commodity prices and low demand from China. Going forward, the Australian dollar is expected to remain under pressure On domestic front, benchmark bond yield is expected to ease further as Reserve Bank of India rejected the high yield bids for its open market operations, which was conducted to tighten the liquidity. The equity markets will be primarily driven by corporate earnings data for first quarter of FY

3 Charts of the week USDINR Weekly Chart USD/INR Weekly Chart In Weekly chart of USDINR, we are observing that the pair is trading very close to the long term trendline support which is at levels. Prices have taken support three times near levels, where the nationalized banks are buying. If is breached, then we expect the USDINR pair could test because it will be a break of a 4 year trendline support which has been tested more than 8 times. If holds, then the pair will gradually move towards and where USDINR has taken resistance multiple number of times. DAX Weekly Chart DAX Weekly Chart In the weekly chart of DAX, we are observing that the prices are trading in a primary uptrend. Recently, the prices were trading in a FLAG type of a formation which is a continuation pattern. During the week, prices gave a breakout from this FLAG pattern with a GAP UP suggesting strength. Weekly RSI has also given a positive crossover. The primary uptrend in DAX has resumed and we expect the index to go up to levels of which is the previous top.

4 Economic Calendar of the upcoming week Date 21-July-Tue Event AUD Monetary Policy Meeting Minutes AUD CPI q/q GBP Monetary Policy Meet WTI Crude Oil Inventory GBP Retail Sales US Unemployment Claims JPY Trade Balance CNY Manufacturing PMI CNY Industrial Production y/y EUR German PMI USD Homes Sales USD Homes Sales : 7th Floor- Sangita Ellipse Sahakar Road Vile Parle (East) Mumbai 57 admin@indiaforex.in

5 ABOUT US IFA Global is one of the leading Treasury Solutions firm.we help companies explore extraordinary opportunities, manage and sustain growth through efficiency and transparency. We have always believed that every client needs a bespoke offering and we have a long history of serving clients with tailored offerings as per their needs. Since 2005, we have been a trusted partner with over 300 permanent companies across 30 different industries. We have our presence across India, Dubai and Hong Kong. IFA Global MUMBAI 7th Floor, Sangita Ellipse Sahakar Road, Vile Parle (East) Mumbai Telephone: Website: research@ifaglobal.net AHMEDABAD 1004-B, Synergy Corporate Road, Prahlad Nagar Ahmedabad IFA Global DMCC DUBAI Unit No: 3O Jewellery & Gemplex Plot No: DMCC-PH2-J&GPlex Jewellery & Gemplex Dubai UA E Telephone: IFA Global Advisors Ltd. HONG KONG 4210, Office Tower Convention Plaza, 1 Harbour Road Wan Chai, Hong Kong Telephone: BANGALORE 2nd Floor, Cears Plaza 136, Residency Road Bangalore NEW DELHI Tapasya Corporate Heights Ground Floor, Sector- 126 Noida Uttar Pradesh Disclaimer This report has been prepared by IFA Global. IFA Global shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. IFA Global nor any of directors, employees, agents or representatives shall be held liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. No liability whatsoever is accepted for any loss arising (whether direct or consequential) from any use of the information contained in this report. This statement, prepared specifically at the addressee(s) request is for information contained in this statement. All market prices, service taxes and other levies are subject to change without notice. Also the value, income, appreciation, returns, yield of any of the securities or any other financial instruments mentioned in this statement are based on current market conditions and as per the last details available with us and subject to change. The levels and bases of, and reliefs from, taxation can change. The securities / units / other instruments mentioned in this report may or may not be live at the time of statement generation. Please note, however, that some data has been derived from sources that we believe to be reliable but is not guaranteed. Please review this information for accuracy as IFA Global cannot be responsible for omitted or misstated data. IFA Global is not liable for any delay in the receipt of this statement. This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IFA Global to any registration or licensing requirements within such jurisdiction. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. IFA Global reserves the right to make modifications and alterations to this statement as may be required from time to time. However, IFA Global is under no obligation to update or keep the information current. Nevertheless, IFA Global is committed to providing independent and transparent information to its client and would be happy to provide any information in response to specific client queries. Neither IFA Global nor any of its directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. The information provided in these report remains, unless otherwise stated, the copyright of IFA Global. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright IFA Global and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders.