ASIA E.U U.S.A Global Market Overview Wednesday 27 June 2018 RBI said that PSU banks account for over 85% of total frauds in banking system in 2017-18 and show and increasing trend both in terms of number and quantum in its financial stability report released yesterday. President Trump signaled that he could give more power to an existing government body that reviews foreign investments for national security threats has softened his plans to impose curbs Chinese investments. Fresh comments come in after heavy sell off in U.S equities following the reports on white house seeking to impose curbs on Chinese investment into U.S Tech companies. The Canadian government is looking to impose tariffs to thwart a potential flood of steel imports as a result of global exporters trying to divert steel originally meant for U.S. U.S markets posted a minor recovery after the trade war driven selloff, Dow Jones moving up by 0.12% and NASDAQ up by 0.39%. Asian Equities were seen trading mixed with Nikkei, Hang Seng and KOSPI in Red and Straits, Taiwan in marginally green. Indian Rupee is likely to open near 68.37 a dollar and is expected to trade between 68.20 68.60 range for the day. Markets Indices Last Close Previous close % CHANGE Currencies Open Previous close % CHANGE S&P 500 2723.06 2717.07 0.22 USDINR-S 68.42 68.25 0.25 Dow Jones 24283.11 24252.80 0.12 DXY 94.60 94.54 0.07 NASDAQ 7561.63 7532.01 0.39 EURUSD 1.1658 1.1665-0.06 DAX 12234.34 12270.33-0.29 GBPUSD 1.3226 1.3240-0.11 FTSE 7537.92 7509.84 0.37 USDJPY 109.9 109.76 0.13 CAC 5281.29 5283.86-0.05 USDCNY 6.5963 6.5697 0.40 STOXX600 375.90 374.90 0.27 FPI FLOWS Current Previous Interbank Rate USD LIBOR EURIBOR NIKKEI 22342.00 22338.15 0.02 Equity SHANGHAI 2844.51 2859.34-0.52 Debt -675.09-224.48 KOSPI 2350.92 2357.88-0.30 Total -355.36 1016.37 HANG SENG 28881.40 28961.39-0.28 SENSEX 35490.04 35470.35 0.06 US 10Y 2.880 2.877 0.10 NIFTY 50 10769.15 10762.45 0.06 IRF 95.35 95.62-0.28 319.73 1240.85 O/N 1 W 1M 3M 6M 1Y 1.93500 1.98688 2.10188 2.33563 2.50250 2.77094-0.43657-0.42514-0.39829-0.36714-0.31857-0.23157
USDINR Intraday Outlook The dollar index recovered marginally yesterday after closing in red for three consecutive trading days. White house attempts to pull down the volatility amid news on U.S considering to impose curbs on Chinese investments lifted the American equities and Dollar index against a basket of currencies. Domestically, as expected Indian rupee moved weaker yesterday, high dollar demand by importers who tried to grab dollars during the late trading sessions moved the USDINR to reach above key resistance at 68.30. Surge in crude oil prices which has been the major threat for rupee weakness in the recent times also added weakens to the Rupee yesterday. For the day we expect the rupee to continue remain weaker with a strong support at 68.60. The daily chart of USDINR shows that the pair has traded in a broad range of 68.25 on higher side and 68.07 on lower side and closed in a positve note. As expected pair is making higher highs and lower highs continuously and the pair today has opened above 68.30 which is a physiological level.the pair is trading above 25 EMA and 50 EMA crossover and technical indicators like RSI towards north and MACD above zero line suggest bullish momentum in the pair. 25 EMA placed at 68.30 likely to act as support for the pair. Traders can initiate Buy on dips strategy for the pair. Bullish-Sideways Buy USDINR July Fut 68.55-68.60 SL 68.45 TGT 68.85 68.20-68.70 (Spot) 67.91 67.99 68.05 68.20 68.42 68.48 68.56
EURINR Intraday Outlook Euro closed in negative yesterday after moving higher for three straight days, U.S equities and treasury yields recovering after multiple attempts from trump administration to cool off trade war tensions. Although the Euro has recovered marginally after policy driven selloff the long term fundamental outlook still remains weaker for the single currency. With no major economic events on the calendar for Euro zone we expect the Euro to trade in a narrow range ahead of the EU leaders Summit. The daily chart of EURUSD shows that the pair has traded in a broad range of 1.1720 on higher side and 1.1634 on lowers side and closed in a negative note. In last trading session, 25 EMA placed at 1.1720 acted as a resistance and the pair had a fall and currently trading at 1.1654 level. As the pair is trading below 25 EMA and 50 EMA bearish crossover with RSI at 45 and MACD below zero line indicates bearishness in the pair. 25 EMA placed at 1.1720 likely to act as a resistance for the day and supports can be seen at 1.1639 which is 61.8% Fibonacci level (swing high of 1.1852 and low of 1.1500).Expect bearish view for the day. Traders can initiate sell on rise strategy in the pair for the day. Bearish-Sideways (Spot) Sell EURUSD July Fut 1.1700-1.1710 SL 1.1730 TGT 1.1670-1.1660 Sell EURINR July Fut 80.30-80.35 SL 80.45 TGT 80.00 1.1620-1.1720 79.00 79.17 79.27 79.70 79.79 79.89 80.06
GBPINR Intraday Outlook The British pound moved lower yesterday erased most of its last three day gains yesterday. Comments from incoming BOE member Haskel who would be taking over from Ian McCafferty as member of BOEs MPC moved GBP lower. He said that opportunities for adjusting bank rate to control the economy appear to be growing more. He also sees risks if BOE raises rates too quickly has taken the GBP lower. With no major changes in economy we continue to remain bearish on GBP, but for the day we would see a consolidation in GBPUSD pair. The daily chart of GBPUSD shows that the pair has traded in a broad range of 1.3292 on higher side and 1.3191 on lower side and closed in a negative note. The pair faced resistance at 1.3290 and had a fall and currently trading at 1.3225, 25 EMA placed at 1.3290 acted as a resistance for the pair in last trading session. As the pair is trading below 25EMA and 50EMA bearish crossover with RSI at 36 and MACD below zero line indicates bearish momentum in the pair. 25 EMA placed at 1.3320 likely to act as resistance and supports can be seen at 1.3173 (previous support). Traders can initiate sell in rise strategy for the day. Sideways-Bullish (Spot) Sell GBPUSD July Fut 1.3255-1.3265 SL 1.3280 TGT 1.3220-1.3210 Sell GBPINR July Fut 91.10-91.20 SL 91.35 TGT 90.80-90.70 89.56 89.76 89.88 90.30 90.49 1.3300-1.3220 90.61 90.81
JPYINR Intraday Outlook The Japanese Yen moved lower yesterday amid trade war tensions marginally softened after the trump comments on curbs on Chinese investments in U.S tech companies. U.S 10 year yields holding 2.88% levels for past couple of sessions also added minor weakness to the Yen. Looking at the Japanese economic outlook under current monetary policy tightening environment by global central banks we continue to remain bearish on Japanese Yen but an escalation in Trade war tensions which would jolt the Asian market would add gains to the Yen. For the day we expect the yen to remain in sideways range. The daily chart of USDJPY shows that the pair has traded in a broad range of 110.21 on higher side and 109.35 on lowers side and closed in a positive note. The pair after facing resistance at 111.00 had a pullback and 50 EMA placed at 109.50 acted as a support and pair had a bounce back. As the pair is trading above cluster of 25 EMA and 50 EMA bullish crossover with RSI at 50 and MACD above zero line indicates bullish momentum in the pair.109.20 likely to act as support for the pair which is 50.0% Fibonacci levels (swing of 113.80 and 104.70). Traders can initiate buy on dips strategy for the day. Sideways-Bullish Buy USDJPY July Fut 109.50-109.60 SL 109.30 TGT 109. 90 Sell JPYINR July Fut 62.65-62.75 SL 62. 85 TGT 62.40 (Spot) 62.02 62.08 62.11 62.20 62.41 109.40-110.30 62.44 62.50
Currency USDINR EURINR GBPINR JPYINR Hedging Strategies- Spot Levels June Imports Strategy June Exports Strategy Part hedging done at 67.20 & 67.50. Part Hedging done at 67.80 & 68.30 Spot Part Hedging to be done at 78.80 Spot Part Hedging done at 79.00 Spot. Next to be done at 79.80 Spot Part Hedging done at 89.70 Spot. Next to be done at 89.20 Spot Part Hedging done at 90.00 Spot. Next to be done at 90.50 Spot Part Hedging done at 61.00 Spot. Next at 60.50 Spot. Part Hedging done at 61.80 Spot Economic Data for the Day Time Currency Data Forecast Previous 01:30 PM EUR M3 Money Supply y/y 3.8% 3.9% 02:00 PM GBP GBP BOE Gov Carney Speaks BOE Financial Stability Report 06:00 PM USD Core Durable Goods Orders m/m 0.5% 0.9% USD Durable Goods Orders m/m -0.9% -1.6% 08:00 PM USD Crude Oil Inventories -2.4M -5.9M 08:30 PM USD FOMC Member Quarles Speaks Report prepared by: Siddhesh Ghare Deepak Agarwal Sridhar Peddoju Bharath Sunnam siddhesh.ghare@karvy.com deepak.agarwal@karvy.com sridhar.peddoju@karvy.com bharath.sunnam@karvy.com 040-33216636 040-33216635 www.karvyforex.com Head Office Karvy Millennium,Plot No 31, Financial District, Gachibowli, Hyderabad - 500 031. T: +91-40-33216636 / 6635 Corporate Office 131, Andheri Industrial Estate, Off Veera Desai Road, Andheri (W), Mumbai-400053. T: +91-22-26399040, Mob No. 9987466794 Disclaimer: The information and analysis contained in this document come from sources believed to be reliable and our own internal research; however, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of this information. Nothing contained in this publication shall constitute an offer to sell/purchase or an invitation/ solicitation to do so for any currency, security, commodity or equity. Karvy Forex & Currencies Pvt. Ltd. accepts no liability whatsoever for any loss, howsoever arising, from any use of this document, its contents or otherwise arising in connection therewith.no part of this document can be circulated or reproduced in any form without prior approval of Karvy Forex & Currencies Pvt. Ltd.