12 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$INR March futures Sell 65.15 64.9 65.3 1-2 days PRODUCT 2 Click here... Research Analysts Amit Gupta amit.gup@icicisecurities.com Gaurav Shah Gaurav.shah@icicisecurities.com
Forex and global equities CURRENCY OUTLOOK Spot Currency C u r r e n cy C lo s e Pvs. C lo s e % C h an g e Rupee 65.17 65.15 0.03 US$ index 90.09 90.18-0.10 EuroUS $ 1.2307 1.2312-0.04 G BPUS$ 1.3850 1.3811 0.28 US $JPY 106.82 106.23 0.56 A UDUS$ 0.7844 0.7789 0.71 US $C HF 0.9513 0.9511 0.02 The rupee was little changed for the week against the US$ after two weekly losses, as a corresponding weekly gain in the dollar index on upbeat U.S. data offset gains from the ruling Party s victory in state polls and waning fears of a global trade war should ideally begin to worry ECB, as it would The US$ declined against majors post US February employment undermine inflation growth in the Eurozone data. Non farm payrolls were sharply higher at 313000 rolls, however unexpected declined in hourly wages growth rate took its toll on US$. Wage growth rate declined sharply to 2.6% from 2.9% seen in January. This could lead to some gains in emerging currencies as well some majors Global Equity Indices In d ice s C lo s e Pvs. C lo s e % C h an g e Dow Jones 25336 24895 1.77 Na s da q 7101 6966 1.93 FTS E 7225 7203 0.30 DA X 12347 12356-0.07 Ha ngs a ng 31466 30996 1.52 Nikkei 21789 21469 1.49 SG X Nifty 10337 10214 1.21 Equity benchmarks extended losses for the second consecutive week to shut shop the week at 10227, down 232 or 2.2%. The sell off was intense across broader markets as Nifty Midcap & small cap dropped over 3.8% & 4.5%, respectively1:1.2. *Asian equity indices at 8.00 am March 12, 2018 ICICI Securities Ltd. Retail Equity Research 2
Debt and FII activity Benchmark yield C lo s e Pvs. C lo s e % C h an g e India 10-yr 7.67 7.66 0.18 US 10-yr 2.89 2.86 1.28 Eur 10-yr 0.65 0.63 3.18 UK 10-yr 1.49 1.47 1.22 JPY 10-yr 0.05 0.05-1.85 Sovereign bond rose for the first time in four weeks, as hopes of inflation slowing in February and banking system liquidity being comfortable towards the fiscal year end aided sentiment. US 10-year yields ended rose to 2.89% on Friday as traders continue to remain bearish on debt ahead of March FOMC monetary policy meeting wherein a 0.25% rate hike is expected Commodities C lo s e Pvs. C lo s e % C h an g e G old 1324 1322 0.15 C opper 311.6 305.9 1.88 Brent 65.5 63.6 2.96 Spot gold was ended the session with mild gains even as US$ declined on the back of lower than expected wage growth data. Gold to remain supported due to rise in inflation expectations Crude oil gained sharply on the back of decline in US drilling activity. Operating rigs fell by 4 to 796, a first decline in 7 weeks. However failure to rise above $70 could spell doom for OPEC oil supply cuts FII Activity Se g m e n t Pu r ch as e Se ll Ne t cr o r e s Equity 4870 5475-605 Debt 816 1016-199 Foreign institutional investors (FII) were net sellers to the tune of 804 crore in the previous session FIIs have been net sellers to the tune of almost 1024 crore in March 2018 March 12, 2018 ICICI Securities Ltd. Retail Equity Research 3
INR futures and Outlook Currency futures on NSE ch n g (%) C o n tr acts L T P ch n g (%) OI V o l OI V ol March 65.30 0.07 2107444 950646 0.78-11.98 A pril 65.56 0.08 375748 92354 3.65 3.05 Mar-A pr -0.26 - - 858292-90.29 A pr-may -0.23 - - 76373-82.70 The near month dollar-rupee March contract on the NSE was at 65.30. The March contract open interest increased 0.78% from the previous day c We expect the US$INR to meet resistance at higher levels. Utilise upsides in the pair to initiate short positions Pivot levels Fu tu r e s Pivo t S1 S2 R1 R2 US$INR (Mar) 65.26 65.38 65.11 65.36 65.42 US$INR (A pr) 65.52 65.64 65.37 65.62 65.68 EURINR (Mar) 80.48 81.10 80.00 80.66 80.97 EURINR (A pr) 80.86 81.06 80.68 80.93 81.04 G BPINR (Mar) 90.30 90.90 89.73 90.56 90.86 G BPINR (A pr) 90.68 90.92 90.39 90.85 90.97 JPY INR (Mar) 61.23 61.51 60.98 61.34 61.48 JPY INR (A pr) 61.58 61.84 61.35 61.68 61.81 US$INR Strategy US $INR Ma rch fu tu re s co n tra ct (NS E ) V ie w: B e a rish o n US $INR S ell U S $INR in the range of 65.12-65.18 Mark et L ot: U S $1000 Target: 64.95 / 64.85 S top L os s : 65.30 S upport R es is tance S 1/ S 2: 65.00 / 64.85 R 1/R 2:65.20 /65.30 March 12, 2018 ICICI Securities Ltd. Retail Equity Research 4
US$INR Spot currency US$INR Spot Strategy Update Date C u r r e n cy Str ate g y Re c. T ar g e t SL (P/L )* C o m m e n t 9-Mar-18 p air US$INR Buy future 65.15 65.40 65.00 60 Exit in profit March 12, 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 65.25 64.65 66.00 1 month 9/3/2018 JPY INR Monthly currency Buy JPY INR 61.20 63.10 60.00 1 month Back... March 12, 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 12, 2018 ICICI Securities Ltd. Retail Equity Research 7
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