Good Morning Treasurers,
This is your host Parthesh Shah, Co-Founder of Knight Fintech and you are listening to Knight Snippets.
Here is what you need to know before going into trade for 28-July-2021
International Market:
- Investors are cautious ahead of the Federal Reserve's monetary policy meeting today
- US 10-year had fallen 4 bps closing at 1.25% and 30-year also fell 4bps closing at 1.89% on Tuesday
Watch Out:
- FOMC meeting today
Crude Oil Market:
- Crude is trading at $74.85/bbl
- Crude Short Term Range: $73-77
Currency Market:
- Dollar index (DXY) is at: 92.46
- DXY today's range: 92.28 - 92.88 (trading session to be volatile - FOMC)
- USDCNY or Chinese yuan is at 6.51
- USDINR with a high of 74.54, closed at 74.47
Support: 74.30
Resistance: 74.75
Trading idea:
- Avoid USDINR holding trades today as FOMC meeting is awaited
- Trade with our daily support and resistance ranges
Domestic Market:
- Indian bond traders are also awaiting US Federal Reserve's monetary policy decision, due late night today
- Trading volumes were thin and market was dull yesterday
- 5.63 GS 2026 closed at 5.69% Vs 5.68% the previous trading day;
- 6.64 GS 2035 closed at 6.79% Vs 6.77% the previous trading day;
Knight's expectation from FOMC meeting:
#1: US FED is expected to continue to support the economy with delta variant fears still looming around
#2: Stick to the stance that, "inflation is transitory"
#3: There can be some early indications of tapering of bond buying program
#4: This extra accommodative stance will give RBI much needed room to continue with their policy stance to support growth
Watch Out:
- FOMC meeting and avoid placing any bets today
Trading Strategy:
- 6.10 GS 2031 is trading @ 6.18%
- For those, who have not taken positions yet, wait for tomorrow or buy near today's high
- For those, who already have taken a position @ 6.17%, HOLD-ON to your buys
- If FOMC is supportive, we may be able to see a small 2-3 bps rally before Friday in benchmark paper
- 6.64 GS 2035 will be out of fashion very soon. So, start liquidating your 6.64 GS 2035 HFT positions
- Knight Research team is looking some value in 6.64 GS 2035 near 6.80% levels. Wait for buying
Trading Range:
6.10 GS 2031 range: 6.15% - 6.20%
That's it for today. You were listening to Knight Snippets with Parthesh Shah from Knight Fintech.
See you tomorrow with a new episode of Knight Snippets.
| Indicator | Last | Expected | AsOn | Next |
|---|---|---|---|---|
| GDP YoY JUN [RU] | 10.9 | 10.8 | 23/07/21 | 27/07/21 |
| Interest Rate Decision [US] | 0.25 | 0.25 | 23/07/21 | 28/07/21 |
| Goods Trade Balance JUN [US] | -88,110 | -85,730 | 23/07/21 | 27/07/21 |
| Inflation Rate YoY Q2 [AU] | 1.10 | 0.90 | 23/07/21 | 27/07/21 |
| Consumer Confidence JUL [KR] | 110.3 | 105.2 | 23/07/21 | 27/07/21 |
| Retail Sales YoY JUN [RU] | 27.2 | 35.1 | 23/07/21 | 27/07/21 |
| Unemployment Rate JUN [RU] | 4.90 | 5.20 | 23/07/21 | 27/07/21 |
| Wholesale Inventories MoM JUN [US] | 1.30 | 1.10 | 23/07/21 | 27/07/21 |
| Inflation Rate QoQ Q2 [AU] | 0.60 | 0.90 | 23/07/21 | 27/07/21 |
