12/04/2018

USDINR opened at 64.98 y’day and the pair traded in the 64.98-65.31 range. USDINR closed at 65.31, gain of 33 ps for USD as against prior close of 64.98.RBI reference rate was fixed at 65.12. Rupee weakened due to defense related USD purchases by SBI. Indian G-SEC yields rallied significantly to 7.53%. Yields fell last week after RBI policy. 10 Year yield declined to 7.12% last week. April USD/INR closed at 65.39, gain of 30 ps for USD as compared to prior day’s close of 65.09. April Euro/INR closed at 81, GBP/INR at 92.70 and Yen/INR at 61.25.

FII’S bought 95 Cr of Indian Equities in April . FII’S have bought Rupees 3706 Cr of Indian debt securities in April . On a cumulative basis, FII’S have bought Rupees 14977 Cr of Indian Equities till date for this calendar year and have bought Rupees 1801 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 0.14% y’day. DOW declined 218 points (0.90%) y’day.Nikkei declined 0.49% and Hang seng climbed 0.55% Y’day.

Euro is now at 1.2368, Pound at 1.4182,Yen at 106.88.     

Commodities: Gold is now at USD 1354 and WT1Crude at USD 67.14.

Interest rates: USD 10 Yr yield is at 2.79% and 3 m libor closed at 2.29%. Indian 10 yr benchmark yield closed at 7.53%.   

Economic news: IMF Managing Director expressed her optimism on the global economy. She said the “economic picture is “mostly bright” and “the sun is still shining”. Global momentum is driven by “stronger investment”, “rebound in trade” and “favorable financial conditions”. She said the forecast to be release next week will “continue to be optimistic”.

She said that Eurozone’s upswing is “now more widely spread across the region”. US growth will “likely accelerate further due to expansionary fiscal policy. In Asian emerging markets, China and India lead by “rising exports and higher domestic consumption. But she also warned of “darker clouds looming”. Momentum in 2018 and 2019 will eventually slow because of “fading fiscal stimulus” in the US China, rising interest rates and tighter financial conditions.

Chinese central bank Governor said that the Chinese government will remove foreign ownership caps on Chinese banks by the end of June. Secondly, foreign securities and life insurance companies will be allowed to hold majority stakes in their Chinese counterparts. That is, ownership could be raised from 49% to 51%. And such restriction will also be abolished in three years. Thirdly, by the end of June, the permitted business scope for foreign insurance agents will be expanded. Fourthly, the daily quota for foreign investors to buy Chinese stocks and for Chinese investors to buy Hong Kong traded stocks will be quadrupled.

Data Highlights:-  US CPI declined -0.1% m/m.

 -UK industrial production climbed 0.1% m/m and manufacturing declined -0.2% m/m.

 -Japanese core machinery orders climbed 2.1% m/m.

 Thursday’s calendar: – US weekly jobless claims    

Daily Support/Resistance table

MAJOR SUPPORTS/RESISTANCES AND TREND TABLE

Technicals: Spot closed above 100 and 200 day major moving averages. 20 day moving is at 65.05. 50 day moving average is at 64.65. 200 day moving average is at 64.47. Daily MACD is in sell zone, implying top at 65.30 . Important support zone is at 64.85. Important resistance is  at 65.60. Spot closed above its average level of the day.  

Intra day supports and resistances for April contract are:

PP: 65.27,S1:65.14, S2:64.91, R1:65.51, R2:65.63

Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is above 100 and 200 day major moving averages, but below 20 and 50 day moving averages. Next Major resistance is at 1.2475 and later at 1.2555. Major support is at 1.2150. Daily MACD is in sell zone, implying an important top at 1.2475. Weekly MACD is in sell zone, implying important top at 1.2560.

GBP/USD: Trend is bullish in daily chart. Daily MACD  is in sell zone, implying important top at 1.4250 and weekly MACD is  in sell zone, implying important top at 1.4345. The pair is trading above 200 day major moving average. Important resistance is at 1.4245/1.4345. Important support is at 1.3710.   

USD/YEN: The pair is below major moving averages. Daily MACD is in buy zone, implying important bottom at 104.56. Important support is at 104.56. Important resistance is  at 108 and later at 110.40.