June 6, 2018 Daily Currency outlook PRODUCT 1 Other Product offerings Recommendation in the report Currency pair Contract Action Price Target Stoploss Duration US$INR June futures Buy 67.18 67.46 67.04 1-2 days Monthly Currency and Thematic reports Currency US$INR Put Action Buy PRODUCT 2 Click here... Research Analysts Amit Gupta amit.gup@icicisecurities.com Gaurav Shah Gaurav.shah@icicisecurities.com
CURRENCY OUTLOOK Forex and global equities Spot Currency Currency Close Pvs. Close % Change US$INR 67.15 67.11 0.06 Dollar index 93.88 94.04-0.17 EUR-US$ 1.1718 1.1699 0.16 GBP-US$ 1.3393 1.3313 0.60 US$-JPY 109.79 109.82-0.03 AUD-US$ 0.7616 0.7648-0.42 US$-CHF 0.9844 0.9877-0.33 Rupee extended slight losses as a cautious tone prevailed ahead of RBI s monetary policy meeting outcome today. Expectations vary from RBI adopting hawkish stance to raising rates by 25 bps The US$ ended the session slightly lower as rising cross border trade concerns led to investors chasing safe haven bond buying. Mexico is expected to impose customs duty on some agriculture produce from US while there is a risk of other allies taking retaliatory measures. Euro remained on an edge amid ongoing the political drama in Italy while the upcoming ECB monetary policy meeting may provide fresh triggers to the common currency Global Equity Indices Indices Close Pvs. Close % Change Dow Jones 24800 24814-0.06 Nasdaq 7167 7144 0.32 FTSE 7687 7741-0.70 DAX 12787 12771 0.13 HangSang 31295 31093 0.65 Nikkei 22576 22540 0.16 SGX Nifty 10592 10607-0.15 Equity benchmarks witnessed prolonged profit booking over a third consecutive session. This led the Nifty to end the session at 10593, down 35 points or 0.3% Broader markets underperformed the benchmarks as the Nifty midcap and small cap lost 1.3% and 2.5%, respectively. The market breadth remained in favour of declines with A/D ratio of 1:4 *Asian equity indices at 8.00 am Source: Bloomberg, ICICI Direct Research
Debt and FII activity ICICI Securities Retail Equity Research Benchmark yield Close Pvs. Close % Change India 10-yr 7.83 7.88-0.53 US 10-yr 2.93 2.94-0.50 Eur 10-yr 0.37 0.42-11.72 UK 10-yr 1.28 1.30-1.08 JPY 10-yr 0.05 0.05 5.88 Sovereign bonds recovered as traders remained on the sidelines ahead of RBI s monetary policy meeting outcome today. Yields could rise further if the RBI increases interest rates today US 10-year yields declined as investors chased safe haven buying into bonds. Mexico has announced it would impose retaliatory tariffs on US products, adding to concerns on global trade conflicts Commodities Close Pvs. Close % Change Gold 1296 1292 0.34 Copper 319.9 313.5 2.04 Brent 75.4 75.3 0.12 Spot gold rose mildly in line with other safe haven assets while a decline in US$ also aided gains. The upcoming US monetary policy meeting will provide fresh cues in non-interest paying assets Brent crude rose mildly even as market participants await the outcome from Opec meeting. Any signals from Opec to relax supply curbs shall see profit booking in oil FII Activity Segment Purchase Sell Net crores Equity 9642 6663 2979 Debt 744 1111-367 Foreign institutional investors (FII) were net buyers to the tune of 2612 crore on June 1, 2018 FIIs have been net sellers to the tune of almost 2963 crore in June 2018 Source: Bloomberg, ICICI Direct Research, cdsl
INR futures and Outlook ICICI Securities Retail Equity Research Currency futures on NSE chng (%) Contracts LTP chng (%) OI Vol OI Vol June 67.32 0.04 2086981 921822-4.84-28.76 July 67.55 0.03 283985 33001 1.29-56.70 June-July -0.23 - - 888821-96.42 July-August -0.23 - - 29780-90.24 Near-month dollar-rupee June contract on the NSE was at 67.32 in the previous session. June contract open interest declined 4.94% in the previous day c We expect the US$INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions Pivot levels Futures Pivot S1 S2 R1 R2 US$INR (June) 67.30 67.48 67.11 67.41 67.50 US$INR (July) 67.55 67.71 67.39 67.63 67.71 EURINR (June) 78.83 79.22 78.49 78.98 79.17 EURINR (July) 79.29 79.65 78.99 79.41 79.59 GBPINR (June) 89.95 90.55 89.25 90.33 90.64 GBPINR (July) 90.41 91.00 89.76 90.78 91.07 JPYINR (June) 61.39 61.56 61.23 61.48 61.56 JPYINR (July) 61.71 61.89 61.52 61.82 61.90 US$INR Strategy US$INR June futures contract (NSE) View: Bullish on US$INR Buy US$INR in the range of 67.14-67.22 Market Lot: US$1000 Target: 67.42/ 67.50 Stop Loss: 67.04 Support Resistance S1/ S2: 67.20 / 67.0 R1/R2:67.40 /67.50 *Recommendation initiation message shall be broadcasted on iclick2gain Source: Bloomberg, ICICI Direct Research
US$INR Spot currency US$INR Spot Strategy Update Date Currency pair Strategy Rec. Target SL (P/L)* Comment 5-Jun-18 US$INR Buy future 67.35 67.52 67.23 0 Open Source: Bloomberg, ICICI Direct Research
Open Recommendations ICICI Securities Retail Equity Research Date Currency Product Strategy Recommendation price Target Stoploss Time frame 25/05/2018 US$INR June Options Positional Currency Buy 68.5 Put, Sell 67.5 Put 0.43 1.00-1 month Back... Source: Bloomberg, ICICI Direct Research
Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com ICICI Direct Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai 400 093 research@icicidirect.com
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