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.