16 March 2018 Daily Currency outlook PRODUCT 1 Other Product offerings Mo n th ly C u r r e n cy an d T h e m atic r e p o r ts Recommendation in the report C u r r e n cy p air C o n tr act Actio n Pr ice T ar g e t Sto p lo s s Du r atio n C u r r e n cy G BPINR EUR JPY A ctio n Buy Buy US$INR March futures Buy 64.95 65.20 64.80 1-2 days PRODUCT 2 Click here... Research Analysts Amit Gupta amit.gup@icicisecurities.com Gaurav Shah Gaurav.shah@icicisecurities.com
Forex and global equities CURRENCY OUTLOOK Spot Currency C u r r e n cy C lo s e Pvs. C lo s e % C h an g e Rupee 64.93 64.84 0.15 US$ index 90.14 89.70 0.48 EuroUS $ 1.2305 1.2368-0.51 G BPUS$ 1.3937 1.3962-0.18 US $JPY 106.34 106.32 0.02 A UDUS$ 0.7798 0.7877-1.00 US $C HF 0.9514 0.9449 0.69 The rupee snapped a three-day gain as most emerging market currencies traded weaker amid risk aversion spurred by hawkish US trade rhetoric. Investors are awaiting India February trade data should The US$ ideally remainedbegin largely unchanged, to worrytrading ECB, flatas after itadvancing would 0.5% on Thursday for its biggest rise in the week. While GBP and undermine inflation growth in the Eurozone Euro were overshadowed by losses against JPY. Incoming US economic advisor Larry Kudlow supports strong action against China while supporting trade tariff Global Equity Indices In d ice s C lo s e Pvs. C lo s e % C h an g e Dow Jones 24874 24758 0.47 Na s da q 7031 7041-0.14 FTS E 7140 7133 0.10 DA X 12346 12238 0.88 Ha ngs a ng 31456 31541-0.27 Nikkei 21738 21804-0.30 SG X Nifty 10330 10363-0.32 Equity benchmarks settled the volatile session on a subdued note. The Nifty ended the session at 10360, down 51 points or 0.5%. Sectorally, all sectors ended in the red weighed by profit booking in recently rallied media & PSU banking stocks Broader markets continued to outshine, as the Nifty midcap & small cap gained 0.4% & 0.85%, respectively, with positive A/D ratio at 1.5:1 *Asian equity indices at 8.00 am March 16, 2018 ICICI Securities Ltd. Retail Equity Research 2
Debt and FII activity Benchmark yield C lo s e Pvs. C lo s e % C h an g e India 10-yr 7.63 7.69-0.68 US 10-yr 2.83 2.82 0.39 Eur 10-yr 0.58 0.59-2.87 UK 10-yr 1.44 1.44 0.07 JPY 10-yr 0.05 0.05-8.00 Sovereign bonds bounced after the fall of the last two sessions. Talks on raising FII limits in bonds found momentum US 10-year yields declined to 2.83% as concerns rose over slippage in retail sales growth as well as trade cross border related concerns Commodities C lo s e Pvs. C lo s e % C h an g e G old 1316 1325-0.66 C opper 311.1 314.0-0.92 Brent 65.1 64.9 0.35 FII Activity Se g m e n t Pu r ch as e Se ll Ne t cr o r e s Equity 4306 4356-50 Debt 2553 1798 754 Spot gold declined in yesterday s trade as well even though safe haven currency like JPY rose. Gold is awaiting cues from upcoming Fed s FOMC policy meeting Gains in crude oil halted and are likely to head for a weekly loss as investors weighed surging US crude production against a warning from the IEA of an impending shortfall in global supplies later this year Foreign institutional investors (FII) were net buyers to the tune of 705 crore in the previous session FIIs have been net buyers to the tune of almost 8290 crore in March 2018 March 16, 2018 ICICI Securities Ltd. Retail Equity Research 3
INR futures and Outlook Currency futures on NSE ch n g (%) C o n tr acts L T P ch n g (%) OI V o l OI V ol March 65.00 0.08 1907607 1046334-1.44-20.70 A pril 65.27 0.09 371399 121651 3.60 23.73 Mar-A pr -0.27 - - 924683-88.37 A pr-may -0.23 - - 87311-71.77 The near month dollar-rupee March contract on the NSE was at 65.00. The March contract open interest declined 1.44% from the previous day c We expect the US$INR to find support at lower levels. Utilise downsides in the pair to initiate long positions Pivot levels Fu tu r e s Pivo t S1 S2 R1 R2 US$INR (Mar) 64.98 65.14 64.79 65.08 65.16 US$INR (A pr) 65.21 65.45 64.93 65.38 65.50 EURINR (Mar) 80.39 80.71 80.10 80.51 80.67 EURINR (A pr) 80.89 81.19 80.63 81.01 81.16 G BPINR (Mar) 90.65 91.23 90.16 90.86 91.15 G BPINR (A pr) 91.16 91.72 90.67 91.37 91.65 JPY INR (Mar) 61.32 61.56 61.05 61.48 61.60 JPY INR (A pr) 61.70 61.94 61.43 61.85 61.97 US$INR Strategy US $INR Ma rch fu tu re s co n tra ct (NS E ) V ie w: B u llish o n US $INR B uy U S $INR in the range of 64.90-64.95 Mark et L ot: U S $1000 Target: 65.20 / 65.30 S top L os s : 64.80 S upport R es is tance S 1/ S 2: 64.80 / 64.70 R 1/R 2:65.20 /65.40 March 16, 2018 ICICI Securities Ltd. Retail Equity Research 4
US$INR Spot currency US$INR Spot Strategy Update Date C u r r e n cy Str ate g y Re c. T ar g e t SL (P/L )* C o m m e n t 14-Mar-18 p air US$INR Sell future 65.01 64.75 65.17 0 Not initiated March 16, 2018 ICICI Securities Ltd. Retail Equity Research 5
Open Recommendations Date C u r r e n cy Pr o d u ct Str ate g y Re co m m e n d atio n p r ice T ar g e t Sto p lo s s T im e fr am e 6/30/2017 EURJPY Currency thematic Buy EURINR & Sell JPY INR 16.10 28.00 10.00 6-9 months 7/28/2017 Rupee Currency thematic Sell US$INR 64.35 62.00 66.30 6-9 months 15/02/2018 G BPINR Positional Currency Buy G BPINR March future 90.20 92.60 89.00 1 month 9/3/2018 US$INR Monthly currency Sell US$INR 65.30 64.65 66.00 1 month 9/3/2018 JPY INR Monthly currency Buy JPY INR 61.20 63.10 60.20 1 month Back... March 16, 2018 ICICI Securities Ltd. Retail Equity Research 6
Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai 400 093 research@icicidirect.com March 16, 2018 ICICI Securities Ltd. Retail Equity Research 7
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