• 16 APR
  • Knight Snippet
  • 16/04/2021

Transcript

Good Morning Treasurers,

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 16-Apr-2021.

International Market:-
- Positive news on US economy:

#1: Retail sales rose 9.8% in March, beating economists’ already-optimistic forecasts
#2: Initial claims for unemployment insurance were lower than expected
- Even after the positive news on economy, yields fell

Reason#1:Bond market was beginning to price in a peak for economic growth @ 10% this quarter.

Reason#2: Japanese are  buying US Treasuries, which they had sold-off in March-21 quarter due to profit booking
- Remember, Knight had propelled the idea of Japanese interest?  
- US 10-year closed 8 bps lower at 1.56% and 30-year closed 9 bps lower at 2.23% on Thursday
- China: Economy grew at 18.3% in the first quarter, slightly missing expectations

Crude Oil Market:
- Support: 74.80; Resistance: 75.40
- USDINR structurally weak, may touch 75.50 soon

Domestic Market:
- WPI inflation in March rose to 7.39% from 4.17% in February
- Indian Govt bond prices fell sharply as the results of RBI's G-SAP 1.0 disappointed market participants
- In Yesterday's G-SAP1.0 auction, the cut-offs were as below:

4.48 GS 2023 : 4.55%
5.15 GS 2025: 5.56%
6.79 GS 2027: 6.13%
5.85 GS 2030: 6.03%; Much larger disappointment here
6.22 GS 2035: 6.61%

With the above cut-offs:
5.15 GS 2025 closed at 5.64% Vs 5.59% the previous trading day;
5.85 GS 2030 closed at 6.12% Vs 6.01% the previous trading day;

Remember, in our yesterday's podcast Knight Research said:
- If RBI accepts 5.85 GS 2030 with very little amount or above 6.03%, benchmark will move towards 6.03% - 6.08% range
- Benchmark indeed closed yesterday @ 6.12%, a 11 bps rise in a single day
- Didn't we warn you of this possibility yesterday itself?

15-Apr-2021 SDL Auction Analysis:
- 10-year RJ @ 6.78,  MG @ 6.82
- 12-year J&K @ 6.78

Knight Inference:
- We are looking at the bottom of SDL yields for now
- We strongly advise our clients to get out of SDLs as soon as possible at 6.75-6.80 levels
- 26,000 Cr weekly G-Sec auctions scheduled today
- Underwriting fees by Primary Dealers to be watched
- Knight Research will be available with expected cut-offs  by 10.40am
- Knight Research: Stay out from today's G-Sec auctions

That's it for today.  You were listening to Knight Snippets with Parthesh Shah from Knight Fintech.

See you next week with a new episode of Knight Snippet

Macro Economic Events

Indicator Last Expected AsOn Next
Stock Investment by Foreigners   [JP] 977.6 640.9 13/04/21 15/04/21
Interest Rate Decision   [KR] 0.50 0.50 13/04/21 15/04/21
IMPORTS YoY Mar   [JP] 6,104 5,821 17/04/21 19/04/21
Loan Prime Rate 5 Y APR   [CN] 4.65 4.65 17/04/21 20/04/21
Employment Change MAR   [ A] 88,671 70,706 13/04/21 15/04/21
Retail Sales YoY MAR   [RU] -0.1000 -1.3000 17/04/21 20/04/21
Industrial Production MoM FEB   [JP] 4.30 -2.10 17/04/21 19/04/21
Unemployment Rate MAR   [RU] 5.80 5.70 17/04/21 20/04/21
Unemployment Rate FEB   [GB] 5.10 5.00 17/04/21 20/04/21
FIXED ASSET INVESTMENT (YTD) YoY MAR   [CN] 35.0 25.6 13/04/21 16/04/21
Foreign Bond Investment FEB   [US] -49,138 -65,464 13/04/21 16/04/21
GDP Growth Rate YoY Q1   [CN] 6.50 18.30 13/04/21 16/04/21
Unemployment Rate MAR   [CN] 0.0000 5.3000 13/04/21 16/04/21
House Price Index YoY MAR   [CN] 4.30 4.60 13/04/21 16/04/21
Loan Prime Rate 1Y   [CN] 3.85 3.85 17/04/21 20/04/21
Foreign Exchange Reserves   [IN] 576,870 57,687 13/04/21 16/04/21
Employment Change JAN   [GB] -114.0 -147.0 17/04/21 20/04/21
GDP YoY MAR   [RU] -2.20 0.00 17/04/21 20/04/21
Balance Of Trade MAR   [SG] 6,210 5,608 13/04/21 16/04/21
GDP Growth Rate QoQ Q1   [CN] 2.60 0.60 13/04/21 16/04/21
Balance Of Trade MAR   [JP] -325.4 217.4 17/04/21 19/04/21
Import YoY MAR   [ID] 13,265 16,787 13/04/21 15/04/21
WPI Manufacturing YoY MAR   [IN] 4.17 5.70 13/04/21 15/04/21
EXPORT YoY MAR   [JP] 5,780 6,038 17/04/21 19/04/21
Unemployment Rate MAR   [AU] 5.80 5.60 13/04/21 15/04/21
Industrial Production YoY FEB   [JP] -5.20 -2.60 17/04/21 19/04/21
WPI Food YoY MAR   [IN] 4.17 5.70 13/04/21 15/04/21
Retail Sales YoY MAR   [CN] 33.8 34.2 13/04/21 16/04/21
Industrial Production YoY MAR   [JP] 35.1 14.1 13/04/21 16/04/21
Foreign Bond Investment   [JP] 375.1 1,714.4 13/04/21 15/04/21
WPI Inflation YoY MAR   [IN] 4.17 5.70 13/04/21 15/04/21
FDI (YTD) YoY MAR   [CN] 260.7 448.6 13/04/21 15/04/21

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
6.82% MGSDL 2031 10 Y 200 - 15/04/21 19:28 6.82% 200 Yield 09/04/21 15/04/21 16/04/21
3.96% GS 2022 2 Y 3000 - 16/04/21 16:26 4.2539% 5090 Yield 12/04/21 16/04/21 19/04/21
6.78% JKSDL 2033 12 Y 500 - 15/04/21 19:30 6.78% 500 Yield 09/04/21 15/04/21 16/04/21
NGSDL 2031 10 Y 350 T.B.D T.B.D T.B.D T.B.D Yield 15/04/21 20/04/21 21/04/21
6.76% GS 2061 9 Y 9000 6.84% - 6.88% 16/04/21 16:27 6.8243% 6236 Yield 12/04/21 16/04/21 19/04/21
APSDL 2031 10 Y 400 T.B.D T.B.D T.B.D T.B.D Yield 15/04/21 20/04/21 21/04/21
TSSDL 2051 30 Y 1500 T.B.D T.B.D T.B.D T.B.D Yield 15/04/21 20/04/21 21/04/21
6.78% JSDL 2031 10 Y 1000 6.73% - 6.75% 15/04/21 19:29 6.78% 1000 Yield 09/04/21 15/04/21 16/04/21
364 DTB 21/04/2022 364 D 6000 T.B.D T.B.D T.B.D T.B.D Yield 15/04/21 21/04/21 22/04/21
5.85% GS 2030 10 Y 14000 97.44 - 97.50 16/04/21 16:25 00 0 Price 12/04/21 16/04/21 19/04/21
RJSDL 2031 10 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 15/04/21 20/04/21 21/04/21
182 DTB 21/10/2021 182 D 15000 T.B.D T.B.D T.B.D T.B.D Yield 15/04/21 21/04/21 22/04/21
91 DTB 22/07/2021 91 D 15000 T.B.D T.B.D T.B.D T.B.D Yield 15/04/21 21/04/21 22/04/21

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