• 28 JUL
  • Knight Snippet
  • 28/07/2021

Transcript

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

Macro Economic Events

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

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
6.99% UPSDL 2031 10 Y 2500 7.00% 7.03% 27/07/21 15:20 6.99% 2500 Yield 23/07/21 27/07/21 28/07/21
182 DTB 27/01/2022 182 D 4000 3.54% - 3.56% 28/07/21 13:45 3.5298% 4000 Yield 23/07/21 28/07/21 29/07/21
6.99% WBSDL 2030 9 Y 2500 - 27/07/21 15:19 6.99% 2500 Yield 23/07/21 27/07/21 28/07/21
91 DTB 28/10/2021 91 D 9000 3.40% - 3.42% 28/07/21 13:46 3.3880% 9000 Yield 23/07/21 28/07/21 29/07/21
6.97% TNSDL 2031 10 Y 2000 6.97% - 6.99% 27/07/21 15:18 6.97% 2000 Yield 23/07/21 27/07/21 28/07/21
364 DTB 28/07/2022 364 D 4000 3.74% - 3.77% 28/07/21 13:48 3.7299% 4000 Yield 23/07/21 28/07/21 29/07/21

Credit Research: Exposures and Next IP Dates

IDFC First Bank Ltd.

Debenture

Nayara Energy Ltd.

Bonds/NCDs

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