USDINR opened at 74.07 y’day and the pair traded in the 74.04-74.35 range. Spot USDINR closed at 74.27 , gain of 36 ps for USD as against prior close of 73.91. RBI reference rate was fixed at 74.27 y’day. March USD/INR closed at 74.44, gain of 34 ps for USD as compared to prior day’s close of 74.10. March Euro/INR closed at 83.10, GBP/INR at 91.60 and Yen/INR at 70.25.
FII’S nett sold Rs 21435 Cr of Indian Equities in March till date . FII’S have nett sold Rs 11784 Cr of Indian debt securities in March till date.
Benchmark Nifty declined 7.6% y’day. DOW declined 2997 points (12.93%) y’day. Nikkei declined 2.46% and Hang seng declined 4.03% y’day.
Euro is now at 1.1172,Pound at 1.2246,Yen at 106.64.
Commodities: Gold is now at USD 1518 and WT1Crude at USD 30.18/Brent at USD 30.83.
Interest rates: USD 10 Yr yield is at 0.77% and 3 m libor closed at 0.84%. Indian 10 yr benchmark yield closed at 6.21%.
Economic news: Equity markets slumped, Gold and Crude declined notwithstanding Fed and BOJ easing. Sell off intensified as reported Corona cases across the Globe crossed 1.7 lacs. RBI announced 1 lac Cr LTRO to inject liquidity and conduct USD buy/sell swap. MPC will decide on rate cut.
Fed cut rates by another 100 bps on Sunday (in an unscheduled meeting) to near Zero. In addition, Fed announced massive bond purchase of USD 700 bn. Fed also cut bank reserve requirements to zero and lowered discount window rates (bank short term borrowing cost from Fed) by 150 bps. Fed also announced easy swap lines in conjunction with other 5 major central banks to ease USD liquidity.
Fed Chairman vowed to maintain rates low till the negative economic impact wanes. Rate cut and timing is reminiscent of 2009 emergency action. This time, the fight is against an unknown epidemic threatening lives and systems.
Fed Chairman said that all economic projections are off the table now and the situation is evolving on a daily basis. With major central banks having done their part, it is for the Govt’s to come out with fiscal measures. G-7 Finance ministers are having a meeting via video conferencing and are likely to discuss progress in vaccine development, remedies and fiscal actions.
BoJ announced further monetary easing to counter the economic impact of coronavirus pandemic. In particular, annual pace of ETF purchase is doubled from JPY 6T to JPY 12T. J-REIT purchases are also doubled to JPY 180B per year.
IMF Managing Director said that the fund is ready to mobilize its USD 1T lending capacity to help member countries on coronavirus impacts. And, “as a first line of defense, the Fund can deploy its flexible and rapid-disbursing emergency response toolkit to help countries with urgent balance-of-payment needs.”
Data highlights : – NY mfrg index declined to -21.5, the worst reading since 2009.
Tuesday’s calendar:- US retail sales and industrial production
-EU and German Zew survey
-UK claimant count change and unemployment rate
Daily Support/Resistance table
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
Technicals: Spot closed above 200 day moving average. 20 day moving average is at 72.65. 50 day moving average is at 71.83.200 day moving average is at 70.70. Daily MACD is in buy zone, implying bottom at 70.73. Important support is at 73.80/73.55 and next important resistance is at 74.50. Spot closed above its average level of the day.
Intra day supports and resistances for March contract are:
PP: 74.31,S1:74.06, S2:73.70, R1:74.68, R2:74.92
Hedging strategy for USD/INR: Hedging decisions be taken according to comfort and accounting rates.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above major moving averages. Next Major resistance is at 1.15. Major support is at 1.1060 and later at 1.0970. Daily MACD is in buy zone, implying an important bottom at 1.0775. Weekly MACD is in buy zone, implying important bottom at 1.0775.
GBP/USD: The pair has turned bearish and below major moving averages.Daily MACD is in sell zone, implying important top at 1.32 and weekly MACD is in sell zone, implying important top at 1.3515. Important resistance is at 1.2770. Important support is at 1.22/1.1960.
USD/YEN: The pair is below major moving averages. Daily MACD is in sell zone, implying important top at 112.20. Next important resistance is at 109. Important support is at 106 and later at 101.20.