USDINR opened at 67.99 y’day and the pair traded in the 67.94-68.17 range. Spot USDINR closed at 68.12, gain of 29 ps for USD as against prior close of 67.83.RBI reference rate was fixed at 68.14. June USD/INR closed at 68.13, gain of 30 ps for USD as compared to prior day’s close of 67.83. June Euro/INR closed at 79.59, GBP/INR at 90.37 and Yen/INR at 62.14.
FII’S have sold Rs 4844 Cr of Indian Equities in June till date . FII’S have sold 9290 Cr of Indian debt securities in June till date . On a cumulative basis, FII’S have sold Rupees 1405 Cr of Indian Equities till date for this calendar year and have sold Rupees 40602 Cr of Indian debt in this calendar year till date.
Benchmark Nifty declined 0.55% y’day. DOW declined 328 points (1.33%) y’day.Nikkei declined 0.79% and Hang seng declined 1.29% y’day.
Euro is now at 1.1715, Pound at 1.3286,Yen at 109.47
Commodities: Gold is now at USD 1265 and WT1Crude at USD 68.25.
Interest rates: USD 10 Yr yield is at 2.88% and 3 m libor closed at 2.36%. Indian 10 yr benchmark yield closed at 7.82%.
Economic news: Global markets continued to be in jitters as there are reports that the U.S. Treasury Department is drafting curbs that would block firms with at least 25 percent Chinese ownership from buying U.S. companies with “industrially significant technology”. In a fresh salvo on Friday, US President warned EU of 20% tariff on EU cars imported into US, if EU does not break entry barriers for US cars.
The Bank for International Settlements warned in its annual report that escalation of protectionist measures is one possible trigger of global economic slowdown or downturn. It said that “its impact could be very significant, if such escalation was seen as threatening the open multilateral trading system.”
“Decompression” of historically low bond yields, or “snapback” in core sovereign market yields could be another trigger. And, it could take place “in response to an inflation surprise” and “the perception that central banks will have to tighten more than anticipated. In the US, “the prospective heavy issuance of government debt, combined with the gradual unwinding of central bank purchases, could add to this risk.”
General reversal in risk appetite is a third possible trigger. And, such reversal could reflect a range of factors, including disappointing profits, the drag of the contraction phase of financial cycles where these have turned, a souring of sentiment vis-à-vis EMEs, or untoward political events threatening stability in some large economies. BIS added that from this perspective, “recent events in the euro area are a source of concern.”
Data Highlights: US new home sales climbed to 689k.
-German Ifo survey was in line with consensus at 101.8.
Tuesday’s calendar: US House price index and consumer confidence
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 67.60. 50 day moving average is at 67.25. 200 day moving average is at 65.20. Daily MACD is in buy zone, implying bottom at 66.85 . Important support zone is at 66.85. Important resistance is at 68.40/68.90. Spot closed above its average level of the day.
Intra day supports and resistances for June contract are:
PP: 68.09,S1:67.99, S2:67.85, R1:68.23, R2:68.33.
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 1.1850 and later at 1.1960. Major support is at 1.1508. Daily MACD is in sell zone, implying an important top at 1.1850. Weekly MACD is in sell zone, implying important top at 1.2560.
GBP/USD: Trend is bearish in daily chart. Daily MACD is in buy zone, implying important bottom at 1.31 and weekly MACD is in sell zone, implying important top at 1.4375. The pair is trading below all major moving averages. Important resistance is at 1.3475 and later at 1.3550. Important support is at 1.31.
USD/YEN: The pair is above major moving averages. Daily MACD is in sell zone, implying important top at 110.92. Important support is at 108.10. Important resistance is 110.92 and later at 111.40.