04 JUL
Knight Snippet

Transcript

Good Morning Treasurers,

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

Here is what you need to know before going into trade for 04-July-2022.

International Market:

- U.S. Treasury yields fell on last Friday as recession fears and disappointing economic data left investors looking for safety

- Just 15-days back, US 10-year saw a high of 3.48% and then US FED started raising rates quickly

- The quarter end on Friday brought the asset reallocation from the last passive funds which were looking for safety

- Safe heaven US dollars and US treasuries were bought on Friday and that brings US 10-year at 2.88%

Crude Oil Market:

- Crude is trading at $110.50/bbl

- Crude Short Term Range: $108-114

Currency Market:

- Dollar index (DXY) is at: 105.08

- DXY today's range: 104.88 - 105.27

- USDCNY or Chinese yuan is at 6.70

- USDINR with a intra-day low of 79.12, closed at 78.94

Resistance: 78.75

Support: 79.20

Trading strategy for USDINR:

- As you all know we have been a vocal supporter for a weaker rupee for a long tsime

- RBI intervention near 79.00 is expected

Domestic Market:

- The US treasury yields fall brought some cheer in the market especially in the shorter-end of the curve

- 5.74 GS 2026 closed at 7.04% Vs 7.17%

- 6.54 GS 2032 closed at 7.42% Vs 7.45%

- 6.67 GS 2035 closed at 7.55% Vs 7.57%

Trading Range:

- 6.54 GS 2032: 7.40% - 7.47%

Knight Research's view:

- Trading activity on 5.74 GS 2026 should increase as it offers relatively safer risk/reward parity

- The yields will continue to be range-bound until we get to see new data prints

- Enjoy the range-bound markets and continue to trade in 2026 maturity

- DO NOT forget to pile up Non-SLRs and wait it out for 6-12 months before venturing into longer dated securities

That's it for today.

See you tomorrow with the new episode from Knight Snippets.

Macro Economic Events

Indicator Last Expected AsOn Next
Nikkei Services PMI (June)   [IN] 57.9 57.5 02/07/22 05/07/22
Trade Balance (May)   [US] -107.7 -89.5 05/07/22 07/07/22
Foreign Debt (USD) (Q1)   [IN] 603.4 614.9 29/06/22 01/07/22
Foreign Bonds Buying   [JP] -489.5 -1,600.6 05/07/22 07/07/22
Imports (USD)   [IN] 60.6 63.2 01/07/22 04/07/22
German Trade Balance (May)   [EU] 1.90 1.60 01/07/22 04/07/22
CPI (YoY) (June)   [RU] 17.8 17.3 06/07/22 08/07/22
Exports (MoM) (May)   [AU] 0.0000 1.0000 05/07/22 07/07/22
Markit Composite PMI (June)   [US] 53.6 51.2 04/07/22 06/07/22
PPI (MoM) (May)   [EU] 5.30 2.30 01/07/22 04/07/22
Trade Balance   [IN] -23.3 -23.2 29/06/22 01/07/22
CPI (YoY) (May)   [EU] 36.9 38.5 01/07/22 04/07/22
Services PMI   [AU] 53.2 52.6 02/07/22 05/07/22
Unemployment Rate (June)   [US] 3.60 3.50 06/07/22 08/07/22
Imports (USD)   [IN] 60.6 63.2 29/06/22 01/07/22
Unemployment Rate (May)   [JP] 2.60 2.60 29/06/22 01/07/22
Services PMI (June)   [US] 53.4 53.5 04/07/22 06/07/22
Inital Jobless Claims   [US] 233,000 228,000 05/07/22 07/07/22
Trade Balance   [IN] -23.3 -23.2 01/07/22 04/07/22
CPI (MoM) (June)   [RU] 1.60 0.30 06/07/22 08/07/22
FX Reserves USD   [IN] 590.6 593.3 06/07/22 08/07/22
Services PMI (June)   [EU] 56.1 55.5 02/07/22 05/07/22
Exports (USD)   [IN] 37.3 38.9 29/06/22 01/07/22
Exports (USD)   [IN] 37.3 38.9 01/07/22 04/07/22
Manufacturing PMI   [AU] 55.7 55.8 29/06/22 01/07/22
Nikkei Markit Manufacturing PMI (June)   [IN] 54.7 54.2 29/06/22 01/07/22
Trade Balance (May)   [AU] 9.31 9.30 05/07/22 07/07/22
Services PMI (June)   [JP] 52.6 54.2 02/07/22 05/07/22
Retail Sales (YoY) (May)   [EU] 1.60 5.40 04/07/22 06/07/22

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
TLSDL 2043 21 1000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
TNSDL 2029 7 1000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
TLSDL 2045 23 1000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
182 DTB 05/01/2022 182 D 7000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 06/07/22 07/07/22
91 DTB 06/10/2022 91 D 9000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 06/07/22 07/07/22
364 DTB 06/07/2023 364 D 5000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 06/07/22 07/07/22
HPSDL 2030 8 600 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
WBSDL 2032 10 1500 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
6.99% GS 2051 31 9000 7.84%-7.85% 01/07/22 15:08 7.7029% 9000 Yield 27/06/22 01/07/22 04/07/22
7.38% GS 2027 5 9000 100.6500- 100.6800 01/07/22 15:07 100.81 9000 Yield 27/06/22 01/07/22 04/08/22
PNSDL 2042 20 2400 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
ASSDL 2032 10 1000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
GOI FRB 2028 6 4000 97.1500- 97.1700 01/07/22 15:06 97.0100 4000 Yield 27/06/22 01/07/22 04/07/22
GJSDL 2029 7 1000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
TLSDL 2044 22 1000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
7.54% GS 2036 14 10000 99.3000- 99.3300 01/07/22 15:07 99.5500 10000 Yield 27/06/22 01/07/22 04/07/22
APSDL 2042 20 1000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
APSDL 2040 18 1000 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22
HPSDL 2030 10 400 T.B.D T.B.D T.B.D T.B.D Yield 01/07/22 05/07/22 06/07/22

Credit Research: Exposures and Next IP Dates

Indostar Capital Finance Ltd.

Debenture

Sterlite Industries (India) Ltd.

Debenture