01/06/2018

USDINR opened at 67.42 y’day and the pair traded in the 67.31-67.58 range. Spot USDINR closed at 67.40, loss of 2 ps for USD as against prior close of 67.42.RBI reference rate was fixed at 67.45. Rupee gained initially to 67.31 and then declined to 67.58, before recovering to close at 67.40. June USD/INR closed at 67.57, loss of 4 ps for USD as compared to prior day’s close of 67.61. June Euro/INR closed at 79.15, GBP/INR at 90.22 and Yen/INR at 62.13.

FII’S sold Rs 4739 Cr of Indian Equities in May till date . FII’S also sold 16046 Cr of Indian debt securities in May . On a cumulative basis, FII’S have bought Rupees 3675 Cr of Indian Equities till date for this calendar year and have sold  Rupees 29816 Cr of Indian debt in this calendar year till date.

Benchmark Nifty climbed 1.15% y’day. DOW climbed 306 points (1.26%) Y’day.Nikkei climbed 0.83%  and Hang seng climbed 1.37% y’day.

Euro is now at 1.1686, Pound at 1.3266,Yen at 109.18     

Commodities: Gold is now at USD 1298 and WT1Crude at USD 66.94.

Interest rates: USD 10 Yr yield is at 2.84% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.83%.        

Economic news: Indian Q4 GDP grew 7.7% as against 7.2% in Q 3. For the full fiscal year of 2017-18, GDP grew by 6.7%. Agriculture, manufacturing and construction sectors grew at 4.5 per cent, 9.1 per cent and 11.5 per cent respectively in the fourth quarter. Gross Fixed Capital Formation (GFCF), a useful metric to measure corporate investment activity, grew 14.4 percent at current prices during January-March quarter, due to 9 percent growth in capital goods. Private final consumption expenditure (PFCE) grew at 6.6 percent in 2017-18, lowest in last three years. Government final consumption expenditure (GFCE) or government expenditure grew 10.9 percent in 2017-18 and 16.8 percent in quarter-ended March.

Core sector climbed 4.7% in April. Good monsoon and GST collections are expected to give boost to GDP growth in 2018-19.

US imposed steel and aluminium tariffs on EU, Canada and Mexico as temporary exemption expired. EU is expected to retaliate. Euro was boosted earlier in the day by strong CPI data and abatement of Italian political tension.

Chinese official PMI manufacturing rose to 51.9 in May, up from 51.4, and beat expectation of 51.4. PMI non-manufacturing rose to 54.9, up from 54.8 and beat expectation of 54.8.

Data Highlights: US Personal income climbed 0.3% m/m, spending climbed 0.6% m/m, PCE index climbed 0.2% m/m.

-US Pending home sales declined -1.3% m/m and weekly jobless claims dipped to 221k.

-EU CPI climbed 1.9% y/y and unemployment rate climbed to 8.5%.

Friday’s calendar: – US nonfarm payrolls and unemployment rate

-US ISM(mfrg) and construction spending

-EU PMI(mfrg) and UK PMI(mfrg)

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 67.64. 50 day moving average is at 66.34. 200 day moving average is at 64.66. Daily MACD is in sell zone, implying top at 68.42 . Important support zone is at 67.30 and later at 66.50. Important resistance is  at 68.42. Spot closed below its average level of the day.  

Intra day supports and resistances for June contract are:

PP: 67.61,S1:67.45, S2:67.32, R1:67.74, R2:67.90.

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

CROSS CURRENCY TECHNICALS:

EURO/USD: The pair is below all major moving averages. Next Major resistance is at 1.1820 and later at 1.1960. Major support is at 1.1550. Daily MACD is in sell zone, implying an important top at 1.2415. Weekly MACD is in sell zone, implying important top at 1.2560.

GBP/USD: Trend is bearish in daily chart. Daily MACD  is in sell zone, implying important top at 1.3618 and weekly MACD is  in sell zone, implying important top at 1.4375. The pair is trading below all major moving average. Important resistance is at 1.3450 and later at 1.3550. Important support is at 1.3040.        

USD/YEN: The pair is below 200 day major moving average, but above 50 and 100 day moving averages. Daily MACD is in sell zone, implying important top at 111.40. Important support is at 108.60. Important resistance is  111.40 and later at 113.75.