WEEKLY SYNOPSIS (05/07/19)
Currency Map:
| Currency Pairs | WEEKLY CLOSE | PRIOR WEEK CLOSE | % change |
| EUR/INR | 77.43 | 78.39 | -1.2 |
| GBP/INR | 86.24 | 87.53 | -1.47 |
| JPY/INR | 0.6308 | 0.6446 | -2.10 |
| USD/INR | 68.42 | 69.03 | -0.88 |
Major highlights: Rupee gained 61 ps last week . Trading range was 68.39-69.06.
-Rupee was boosted by constant exporter’s selling to receive higher fwd premia. 1 year fwd
premia climbed to 4.7% annualised. EURO/INR declined tracking Rupee gains. Gold is close
to USD 1400. Brent Crude closed the week at USD 64.47.
-Budget took center stage. Budget stressed on achieving 5 trn economy by 2024, Water to all
by 2024 and affordable housing by 2022. Incenives to EV’S, tax concessions for investment
in affordable housing and purchase of EV’S, investment incentives in solar chargers
manufacturing, railway modernisation, highway construction were all given prority. Easing of
filing for GST returns, ease in IT filing and tax clarifications for angel investors were the
other main highlights of the budget. Increase in Petro cess and increase in duty on Gold are
negatives for common man.
-FII’S were net sellers of Rs 3141 Cr of Indian Equities in July till date . FII’S have
bought Rs 1369 Cr of Indian debt securities in July till date . FII’S have nett invested Rs
75775 Cr in Indian Equity and have nett bought Rs 11734 Cr in debt markets in this calendar
year till date.
-Crude climbed as Saudi Arabia and Russia agreed to extend production cuts.
-Indian Equity indices remained volatile and Nifty ended the week at 11811. 10 Year G-SEC
yield declined to 6.7%.
-Indian IIP and CPI are the focus data events for this week.
-On Global front, USD gained against majors as US employment data was robust.
-US and EU Treasury yields slumped ealy last week. US 10 Year yield hit a low of 1.95%,
before recovering to 2.04% on Friday.
-Markets expect Fed to cut rates by 25 bps in July. However, strong data could force Fed to
wait.
-ECB members indicated possibility of further rate cut or asset purchases.
Next week important events: -Indian CPI, IIP and US FED Chairman’s talk and US CPI
Projected range for coming week: USDINR: 68-69, EURINR:76.50-78, GBPINR:85.50-87.50, JPYINR: 0.6250-0.6400.
Suggestions: Hedge USD receivables on rally to 69.50. USD payables can be hedged
on decline to 68.30-68 levels. EUR Receivables can be hedged at 79.
