• 28 SEP
  • Knight Snippet
  • 28/09/2020

Transcript

Good Morning Listeners,

This is your host Parthesh Shah, Co-Founder of Knight Fintech and you are listening to Knight Snippets.

Here is all what you need to know before going into trade for 28th-Sep-2020.  

International Market:
- In the US market, the bond rates for 10 and 30-year bonds have been falling consistently for the past 3 out of 4 weeks on account of spike in COVID-19 cases and uncertainty over fiscal stimulus

- On Friday, the US 10-year closed at 0.66% and 30-year at 1.40%

- Us 10-year Benchmark Range: 0.66% - 0.69%

Crude Oil Market:
- No major market moving news in crude oil and is stable at $41.77/bbl

- View: Neutral; Long-Term positive with $50/bbl target in 3-6 months

Currency Market:
- Dollar index at 94.52  

- Once again, dollar breached our target of 94.46 and now the next target is 94.80

- Today's dollar range: 94.26 - 94.72

- USDCNY or Chinese yuan is at 6.82

- With rising COVID-19 cases in Europe, dollar is again becoming traders' favorite and dollar momentum is seen

- On Friday, Indian Rupee closed at 73.70 with a high of 73.91

- Today's USDINR range: 73.62 - 74.06

Domestic Market:
- The much awaited borrowing calendar can be announced today

- Let's try to decipher last time, the borrowings so far:

In first half of the year:
Centre had planned to borrow Rs. 6.98 Lakh Cr vs it has actually borrowed Rs. 7.66 Lakh Cr

States on the other hand had planned to borrow Rs. 3.05 Lakh cr vs they have actually borrowed Rs. 3.25 Lakh cr

- In short, both center and states combined, the planned borrowing for first half was Rs. 10 Lakh Cr, and actual borrowing has been Rs. 10.9 Lakh cr

- Not much deviation, but that was in NO_COVID scenario

- GST shortfall-has been ~ Rs. 20,000 Cr/month, translating to Rs. 2.5 Lakh Cr shortfall in revenue

- For second half of the year, the center is expected to borrow Rs. 6 Lakh cr instead of Rs. 5 Lakh cr previous assumption

- So, the additional borrowing will come for sure, the question is: Whether the RBI decides to borrow now or later in the last quarter assessing full COVID impact

- On the contrary, states will need to borrow a mammoth - Rs. 6.25 Lakh cr in the second half, which will be almost double than the first half

Hence, we are of the view that, instead of buying SDLs now, we can wait for increasing our SDL allocations once the borrowing becomes clear.  

We clearly envision SDLs trading above 7.00% anytime soon. If not in next 1 month, then certainly in the next 3-5 months

 Much has been communicated by RBI via OMOs and auction, but that my dear listeners is a topic for diffrent day.  

We all are awaiting RBI's stance on additional borrowings and OMO support to keep the yields in check.

Important Note:
We have spoken a lot and majority of our clients are out waiting on sidelines.

We repeat, last chance to square-off all of your risky trades today before the Oct-March borrowing calendar. This event-risk is not worth taking.  

Last one more point:  
Do you know that states in tomorrow's auction will borrow mammoth Rs. 25,437 Crs?

After today's borrowing calendar, tomorrow's state auction will be a key challenge.  That's it for today.  You were listening to Knight Snippets with Parthesh Shah, Co-Founder of Knight Fintech.

See you tomorrow with the new episode of Knight Snippets.

Macro Economic Events

Indicator Last Expected AsOn Next
Tokyo CPI YOY SEP   [JP] 102.1 102.1 19/09/20 29/09/20
Foreign Exchange Reserves   [IN] 542,013 541,660 19/09/20 25/09/20
Current Account Q   [IN] -2,605 584 19/09/20 30/09/20
Housing Starts YoY AUG   [JP] -12.8 -11.4 19/09/20 30/09/20
Import Price YoY   [SG] 92.1 90.6 19/09/20 28/09/20
Public Sector Net Borrowing AUG   [GB] -28,782 -25,944 19/09/20 25/09/20
Business Confidence SEP   [RU] -5.00 -5.00 19/09/20 25/09/20
Construction Ordera YoY   [JP] -13.4 -22.9 19/09/20 30/09/20
Wholesale Inventories MoM   [US] -1.30 -0.30 19/09/20 29/09/20
Goods Trade Balance   [US] -70,985 -793,200 19/09/20 29/09/20
Fed Manufacturing Index SEP   [US] -3.00 8.00 19/09/20 28/09/20
Government Budget Value   [IN] -8,213 -8,350 19/09/20 30/09/20
Industrial Profits YoY   [CN] 2,511,490 3,102,290 19/09/20 25/09/20
Nationalwid Housing Price YoY SEP   [GB] 436.9 445.5 19/09/20 30/09/20
GDP Growth Rate QoQ   [ G] -2.20 -20.40 19/09/20 30/09/20
Infrastructure Output YoY JUL   [IN] -12.9 -9.6 19/09/20 30/09/20
Industrial Production YoY AUG   [JP] 1.90 8.70 19/09/20 30/09/20
Bank Loan Growth   [IN] 5.50 5.50 19/09/20 25/09/20
GDP Price Index QoQ Final   [GB] 113.4 112.8 19/09/20 30/09/20
Private Sector Credit MoM   [AU] -0.20 -0.10 19/09/20 30/09/20
Mortgage Approvals AUG   [GB] 39.9 66.3 19/09/20 29/09/20
PPI YoY AUG   [SG] -9.60 -8.50 19/09/20 28/09/20
Nationalwid Housing Price MoY SEP   [GB] 436.9 445.5 19/09/20 30/09/20
Deposit Growth YoY   [IN] 11.1 11.0 19/09/20 25/09/20
Retail Sales MoM AUG   [JP] 13.1 -3.3 19/09/20 30/09/20
Industrial Production YoY AUG   [JP] -18.2 -15.5 19/09/20 30/09/20
Corporate Profit JUL   [RU] 3,246 4,309 19/09/20 25/09/20
Business Investment QoQ   [GB] -0.30 -31.40 19/09/20 30/09/20
Corporate Profit QoQ   [US] 1,779 1,569 19/09/20 30/09/20
Export Price YoY   [SG] 90.9 92.4 19/09/20 28/09/20
External Debt Q2   [IN] 563,938 558,548 19/09/20 30/09/20
Retail Sales YoY AUG   [JP] -1.30 -2.30 19/09/20 30/09/20
Mortagage Lending AUG   [GB] 2,387 2,673 19/09/20 29/09/20
GDP Growth Rate YoY   [GB] -1.70 -21.70 19/09/20 30/09/20
Private Sector Credit YoM   [AU] -0.20 -0.10 19/09/20 30/09/20

Auctions

Knight Statistical Poll vs. Actual Results
Security Name Tenure Notified Amount Expected
Cut-Off
Recommended At Actual-Cut-Off Amount Accepted Auction Type Announcement date Auction Date Settlement Date Source
6.44% MHSDL 2028 8 Y 1000 T.B.D T.B.D T.B.D T.B.D Price 25/09/20 29/09/20 30/09/20
HRSDL 2040 20 Y 3000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
4.45% MHSDL 2022 2 Y 1500 T.B.D T.B.D T.B.D T.B.D Price 25/09/20 29/09/20 30/09/20
APSDL 2024 4 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
GASDL 2030 10 Y 100 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
KASDL 2030 10 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
GJSDL 2030 10 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
5.77% GS 2030 10 Y 18000 - 25/09/20 16:17 98.23 136 Price 21/09/20 25/09/20 28/09/20
KLSDL 2022 2 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 25/09/20 25/09/20
UKSDL 2030 10 Y 500 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
4.54% TNSDL 2023 3 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
UPSDL 2030 10 Y 2500 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
MHSDL 2032 12 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
6.80% GS 2060 40 Y 5000 6.77 - 6.80 25/09/20 16:18 100.00 6945 Price 21/09/20 25/09/20 28/09/20
WBSDL 2035 15 Y 2500 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
KASDL 2031 11 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
PDSDL 2029 9 Y 100 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
KLSDL 2024 4 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
ASSDL 2030 10 Y 600 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
MZSDL 2035 15 Y 132 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
JKSDL 2035 15 Y 1005 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
MGSDL 2030 10 Y 250 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
6.97% PNSDL 2040 20 Y 900 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
5.09% GS 2022 2 Y 3000 101.28 - 101.30 25/09/20 16:20 101.29 1054 Price 21/09/20 25/09/20 28/09/20
RJSDL 2023 3 Y 500 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
APSDL 2039 19 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
RJSDL 2030 10 Y 250 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20
TSSDL 2030 10 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/09/20 29/09/20 30/09/20

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