28 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 US $INR EUR JPY A ctio n S ell Buy US$INR A pril futures Sell 65.13 64.87 65.28 1-2 days Click here... PRODUCT 2 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 64.97 64.87 0.16 US$ index 89.37 89.03 0.39 EuroUS $ 1.2403 1.2444-0.33 G BPUS$ 1.4157 1.4229-0.51 US $JPY 105.34 105.41-0.07 A UDUS$ 0.7679 0.7748-0.89 US $C HF 0.9468 0.9456 0.13 The rupee fell against the US$ on the back of concerns over rising crude oil prices as well as the US President s plan to impose tariff to counter rising trade deficit with major trading partners should The US$ ideally posted begin a mild recovery to worry against ECB, majors as even it would as US equities ended sharply lower. A hawkish Fed as well as tariff undermine inflation growth in the Eurozone rhetoric continued to puzzle investors while safe haven currency like JPY gained mildly. As expected, the US$ has some near term supports at 88.0 level while strength in the Euro and British Pound undermines US rate hike prospects Global Equity Indices In d ice s C lo s e Pvs. C lo s e % C h an g e Dow Jones 23858 24203-1.43 Na s da q 6530 6754-3.32 FTS E 7000 6889 1.62 DA X 11971 11787 1.56 Ha ngs a ng 30492 30791-0.97 Nikkei 20940 21317-1.77 SG X Nifty 10126 10171-0.44 Equity benchmarks settled higher for a second consecutive session amid range bound consolidation supported by positive global cues. The Nifty settled at 10184, up 54 points or 0.5% The broader markets outperformed as the Nifty midcap and small cap indices rose 1.3% and 1.7%, respectively. As a result, the market breadth remained positive at 3:1 *Asian equity indices at 8.00 am March 28, 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 7.33 7.62-3.80 US 10-yr 2.78 2.85-2.69 Eur 10-yr 0.50 0.52-3.82 UK 10-yr 1.42 1.44-1.32 JPY 10-yr 0.04 0.02 58.33 Sovereign bond yields declined sharply as the central government intends to lower its quantum of bond buying in the first half of FY19 owing to higher yields, which reduced concerns on a demandsupply mismatch US 10-year yields also fell sharply to 2.78% amid rising concerns over the US President s plan to impose tariffs that could impact the global growth rate if US major trading partners also retaliate Commodities C lo s e Pvs. C lo s e % C h an g e G old 1345 1354-0.62 C opper 299.2 296.1 1.05 Brent 70.1 70.1-0.01 Spot gold declined on profit booking owing to receding concerns over trade tariffs. However, gold may continue to find support due to expected inflation growth as well as tariff led concerns in near term Crude oil remained unchanged ahead of US government weekly stocks data. American Petroleum Institute showed US inventories rose by 5.32 mb last week while government data is expected today FII Activity Se g m e n t Pu r ch as e Se ll Ne t cr o r e s Equity 4426 4937-510 Debt 1971 1985-14 Foreign institutional investors (FII) were net sellers to the tune of 524 crore in the previous session FIIs have been net buyers to the tune of almost 4331 crore in March 2018 March 28, 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 A pril 65.13-0.03 1050015 1091491 2.42-14.64 May 65.38-0.03 333563 84599 3.04-29.03 A pr-may -0.25 - - 1006892-92.25 May-June -0.21 - - 43855-51.84 The near-month dollar-rupee April contract on the NSE was at 65.13. The April contract open interest increased 2.42% from the previous day c We expect the US$INR to meet supply pressure at higher levels. Utilise upsides in the pair to initiate short positions Pivot levels Fu tu r e s Pivo t S1 S2 R1 R2 US$INR (A pr) 65.07 65.25 64.83 65.22 65.31 US$INR (May) 65.32 65.49 65.08 65.46 65.55 EURINR (A pr) 80.99 81.37 80.68 81.10 81.30 EURINR (May) 81.46 81.84 81.16 81.58 81.77 G BPINR (A pr) 92.20 93.20 91.43 92.48 92.97 G BPINR (May) 92.66 93.63 91.92 92.92 93.40 JPY INR (A pr) 61.65 61.89 61.39 61.78 61.90 JPY INR (May) 61.97 62.19 61.72 62.12 62.23 US$INR Strategy US $INR Ap ril 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 65.10-65.16 Mark et L ot: U S $1000 Target: 64.90 / 64.84 S top L os s : 65.28 S upport R es is tance S 1/ S 2: 65.05 / 64.90 R 1/R 2:65.20 /65.30 March 28, 2018 ICICI Securities Ltd. Retail Equity Research 4
US$INR Spot currency US$INR Spot Strategy Update Date C u r r e n cy Str ate g y Re c. T ar g e t SL (P/L )* C o m m e n t 27-Mar-18 p air US$INR Sell future 65.18 65.87 65.33 0 Not initiated March 28, 2018 ICICI Securities Ltd. Retail Equity Research 5
Open Recommendations Date Currency Product Strategy Recommendation price Target Stoploss Time frame 6/30/2017 EURJPY Currency thematic Buy EURINR & Sell JPYINR 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 Back... March 28, 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 28, 2018 ICICI Securities Ltd. Retail Equity Research 7
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