• 16 SEP
  • Knight Snippet
  • 16/09/2020

Transcript

Good Morning Listeners,

This is your host Priyancka Mahore, AVP of Knight Fintech and you are listening to Knight Snippets.

Here is all what you need to know before going into trade for 16-Sep-2020.  

International Market:

On the economic front:
- World's both largest countries had some positive numbers reported

- In US economic data:
#1: A September snapshot of manufacturing activity in New York state jumped to a reading of 17, from the previous month’s 3.7  

#2: An index of August import prices rose 0.9%, while last month U.S. industrial production expanded by 0.4%.  

On China's economic data front:
- Retail sales grew for the first time in 2020, rising 0.5% in August from a year earlier

- Also, Industrial production in China also rose 5.6%, up from July’s 4.8% increase

- With these positive economic news around, bond market was cautious as FED meeting is in progress and hence, US 10-year closed unchanged at 0.68%

Crude Oil Market:
- The American Petroleum Institute (API) reported on Tuesday a draw in crude oil inventories of 9.5 million barrels for the week ending September 11. Analysts had predicted an inventory draw of 1.2-million barrels

- Thus, higher than expected inventory draw had a small rally in crude and is now trading at $40.53/bbl

- But, The United Arab Emirates (UAE), currently OPEC’s third-largest producer, breached its OPEC+ oil production quota by a massive 0.52 million barrels per day (bpd) in August

- Now, if the OPEC+ member countries do not follow the pact due to their constrained finances, then the demand-supply equilibrium will be tilted towards supply side and there will not be a significant rally as we have been saying repeatedly

Currency Market:
- US dollar with a strong support at 93 levels trading at 93.07

- 93 - 93.50 had been a range for quite sometime now and all eyes are on Fed's comments on growth outlook

- On the other hand, USDCNY or Chinese Yuan continues to strengthen on back of strong retail sales and has now reached 6.78

- As we mentioned you yesterday, we are targeting 6.75 levels soon and suggest to carry your positions until the reversal is seen

- Indian rupee was under pressure yesterday and closed cautiously at 73.62 ahead of FOMC meeting today

- The next rupee move will be decided by FED statements and dollar movement

- Important to note is PSBs were seen buying dollar yesterday and it may be on behalf of RBI

 Domestic Market:

Let's start with yesterday's SDL auctions:

- Karnataka 10-Year SDL cut-off at 6.65 and for rest of the states, it was ~6.70% range

As we have been a vocal supporter of holding on your SDL purchases for few weeks and due to higher increased borrowing plan, we may see SDL yields topping 7.00% mark and that might be a good time to pile up some SDLs for your HTM

- One interesting thing to note is to look at OTHERS buying in last few sessions.

15-Sep: 2,442 Cr

14-Sep: 2,351 Cr

12-Sep: 2,098 Cr

So, since Friday's huge devolvement, OTHERS for the past 3 trading sessions have been buying north of 2,000 Cr daily and the official confirmation is not there, but we can't rule out RBI intervention here as well

- As we mentioned yesterday that, we are positive for the bond market for interim due to lower inflation numbers, but the H2 borrowing calendar will start spoiling the party soon. So, be cautious, but now the markets will be range-bound and you can use our intra-day trading ranges rather than taking huge positions

For intra-day trading ranges in USDINR and benchmark bonds, you may reach out to us on 9503145573 or research@knightfintech.com

That's it for today.  You were listening to Knight Snippets with Priyancka Mahore, AVP of Knight Fintech.

See you tomorrow with the new episode of Knight Snippets.

Macro Economic Events

Indicator Last Expected AsOn Next
MPC Vote Cut   [GB] 0.1000 0.1000 11/09/20 17/09/20
Balance Of Trade JUL   [ES] 124,428 1,481,700 19/09/20 21/09/20
Retail Price Index YoY   [GB] 1.10 1.60 11/09/20 16/09/20
Manufacturing Production YoY   [US] -7.70 -5.00 11/09/20 15/09/20
PPI Output MoM AUG   [GB] 0.30 0.00 11/09/20 16/09/20
Inflation Rate MoM AUG   [JP] 0.1000 0.2000 11/09/20 18/09/20
Unemployment Rate   [GB] 3.90 4.00 11/09/20 15/09/20
Balance Of Trade AUG   [JP] 10.9 248.3 11/09/20 16/09/20
Fed Interest rate Decision   [US] 0.25 0.25 11/09/20 16/09/20
MPC Meetings Minutes   [GB] 0.1000 0.1000 11/09/20 17/09/20
Balance Of Trade AUG   [SG] 4,989 3,300 11/09/20 17/09/20
FOMC Economic Projections   [US] 0.25 0.25 11/09/20 16/09/20
Markit Services PMI SEP   [US] 50.0 55.0 19/09/20 22/09/20
Inflation Rate YoY AUG   [JP] 0.1000 0.3000 11/09/20 18/09/20
Interest Rate Decision   [RU] 4.50 4.25 11/09/20 18/09/20
GDP Growth Rate YoY   [RU] 0.0000 0.0000 16/09/20 16/09/20
Manufacturing Production MoM   [US] 0.0000 0.0000 11/09/20 15/09/20
Industrial Production YoY AUG   [RU] -8.00 -5.60 11/09/20 15/09/20
Core Inflation Rate YoY   [GB] 1.80 0.90 11/09/20 16/09/20
Import Price YoY   [JP] -22.3 -20.8 11/09/20 16/09/20
Housing Price Index YoY   [US] -0.20 0.90 19/09/20 22/09/20
Unemployment Rate   [AU] 7.40 7.50 11/09/20 17/09/20
Core Inflation Rate YoY   [GB] 1.80 0.20 11/09/20 16/09/20
Employment Change   [AU] 228,300 114,700 11/09/20 17/09/20
Inflation Rate YoY AUG   [GB] 1.00 0.20 11/09/20 16/09/20
Foreign Bond Investment   [US] -27,719 28,900 11/09/20 17/09/20
Industrial Production MoM AUG   [US] 3.00 1.00 11/09/20 15/09/20
Retail Sales YoY   [US] 2.70 2.20 11/09/20 16/09/20
PPI Input MoM AUG   [GB] 1.80 -0.40 11/09/20 16/09/20
Retail Sales YoY   [GB] -1.60 1.40 11/09/20 18/09/20
Exports YoY AUG   [JP] -19.2 -14.8 11/09/20 16/09/20
Inflation Rate MoM AUG   [GB] 0.40 -0.40 11/09/20 16/09/20
Retail Sales YoY JUL   [CN] -1.10 1.00 11/09/20 15/09/20
Retail Sales MoM JUL   [US] 1.00 1.20 11/09/20 16/09/20
Import Price YoY   [US] 120.7 121.5 11/09/20 15/09/20
PPI Output YoY AUG   [GB] -0.90 -0.90 11/09/20 16/09/20
Interest Rate Decision   [GB] 0.1000 0.1000 11/09/20 17/09/20
Unemployment Rate AUG   [RU] 6.20 6.30 11/09/20 18/09/20
Fed Press Conference   [US] 0.25 0.25 11/09/20 17/09/20
Industrial Production YoY AUG   [CN] -1.10 1.00 11/09/20 15/09/20
Markit Manufacturing PMI SEP   [US] 50.9 53.1 19/09/20 22/09/20
Core Inflation Rate MoM   [GB] 10.7 109.0 11/09/20 16/09/20
home sales MoM   [US] 4,700 5,860 19/09/20 22/09/20
Retail Sales YoY   [RU] -7.70 -2.60 11/09/20 18/09/20
Initial Jobless Claims   [US] 884.0 884.0 11/09/20 17/09/20
GDP Growth Rate YoY   [RU] -6.40 -4.70 11/09/20 18/09/20
PPI Input YoY AUG   [GB] -5.70 -5.80 11/09/20 16/09/20
Employment Change   [US] -220.0 -120.0 11/09/20 15/09/20
Retail Sales MoM   [GB] 13.9 3.6 11/09/20 18/09/20
Balance Of Trade AUG   [IN] -4.83 -5.00 11/09/20 15/09/20
Foreign Exchange Reserves   [IN] 541,431 542,013 11/09/20 18/09/20

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
6.65% KASDL 2030 10 Y 1000 6.60% - 6.65% 15/09/20 15:31 6.65% 1000 Yield 11/09/20 15/09/20 16/09/20
182 DTB 18/03/2021 182 D 13000 3.52% - 3.53% 19/09/20 01:32 3.5462% 13000 Yield 11/09/20 16/09/20 17/09/20
6.73% SKSDL 2030 10 148 6.63% - 6.68% 22/09/20 15:59 6.73% 148 Yield 19/09/20 22/09/20 23/09/20
6.70% NGSDL 2030 10 Y 150 6.60% - 6.65% 15/09/20 15:48 6.70% 150 Yield 11/09/20 15/09/20 16/09/20
6.68% UPSDL 2030 10 Y 1000 6.60% - 6.65% 15/09/20 15:51 6.68% 1000 Yield 11/09/20 15/09/20 16/09/20
182 DTB 25/03/2021 182 D 13000 3.52% - 3.60% 23/09/20 17:25 3.5779% 13000 Yield 18/09/20 23/09/20 24/09/20
5.68% MHSDL 2024 4 Y 1000 - 22/09/20 16:06 5.68% 1000 Yield 18/09/20 22/09/20 23/09/20
6.76% MPSDL 2033 13 Y 1000 6.80% - 6.82% 15/09/20 15:48 6.76% 1000 Yield 11/09/20 15/09/20 16/09/20
6.78% MHSDL 2032 12 Y 1000 6.70% - 6.72% 22/09/20 16:01 6.78% 1500 Yield 18/09/20 22/09/20 23/09/20
364 DTB 23/09/2021 364 D 10000 3.67% - 3.68% 23/09/20 17:24 3.7312% 10000 Yield 18/09/20 23/09/20 24/09/20
5.22% GS 2025 5 Y 12000 99.08 - 99.15 18/09/20 14:35 99.05 12000 Price 14/09/20 18/09/20 21/09/20
6.63% GJSDL 2029 9 Y 1000 - 15/09/20 15:49 6.63% 1000 Yield 11/09/20 15/09/20 16/09/20
6.69% TNSDL 2030 10 Y 1000 6.63% - 6.68% 22/09/20 15:58 6.69% 1000 Yield 18/09/20 22/09/20 23/09/20
6.70% KASDL 2030 10 Y 1000 6.63% - 6.68% 22/09/20 15:57 6.70% 1000 Yield 18/09/20 22/09/20 23/09/20
6.84% TSSDL 2050 20 Y 1000 6.85% - 6.90% 15/09/20 15:32 6.84% 1500 Yield 11/09/20 15/09/20 16/09/20
6.80% ASSDL 2030 10 Y 600 6.63 22/09/20 15:57 6.80% 600 Yield 18/09/20 22/09/20 23/09/20
6.19% GS 2034 14 Y 11000 98.22 - 98.35 18/09/20 14:34 98.22 13000 Price 14/09/20 18/09/20 21/09/20
5.70% BRSDL 2024 4 Y 2000 5.75% - 5.76% 15/09/20 15:36 5.70% 2000 Yield 11/09/20 15/09/20 16/09/20
91 DTB 17/12/2020 91 D 12000 3.25% - 3.26% 19/09/20 01:31 3.3195% 12000 Yield 11/09/20 16/09/20 17/09/20
6.75% KASDL 2033 13 Y 1000 6.80% - 6.82% 15/09/20 15:38 6.75% 1000 Yield 11/09/20 15/09/20 16/09/20
364 DTB 16/09/2021 364 D 10000 3.62% - 3.63% 19/09/20 01:31 3.6897% 10000 Yield 11/09/20 16/09/20 17/09/20
6.78% KASDL 2032 12 Y 1000 6.70% - 6.72% 22/09/20 16:02 6.78% 1000 Yield 18/09/20 22/09/20 23/09/20
5.28% BRSDL 2023 3 Y 2000 - 22/09/20 16:09 5.28% 2000 Yield 18/09/20 22/09/20 23/09/20
6.70% TRSDL 2030 10 Y 400 6.60% - 6.65% 15/09/20 15:55 6.70% 400 Yield 11/09/20 15/09/20 16/09/20
6.70% MHSDL 2028 8 Y 1000 6.55% - 6.57% 22/09/20 16:08 6.70% 1500 Yield 18/09/20 22/09/20 23/09/20
6.74% UPSDL 2030 10 1500 6.63% - 6.68% 22/09/20 16:00 6.74% 1500 Yield 19/09/20 22/09/20 23/09/20
6.76% MGSDL 2030 10 Y 200 6.60% - 6.65% 15/09/20 15:47 6.76% 200 Yield 11/09/20 15/09/20 16/09/20
6.67% RJSDL 2030 10 Y 750 6.60% - 6.65% 15/09/20 15:46 6.67% 750 Yield 11/09/20 15/09/20 16/09/20
6.05% ASSDL 2025 5 Y 500 - 15/09/20 15:45 6.05% 500 Yield 11/09/20 15/09/20 16/09/20
6.74% GASDL 2030 10 Y 200 6.63% - 6.68% 22/09/20 16:07 6.74% 200 Yield 18/09/20 22/09/20 23/09/20
7.16% GS 2050 20 Y 7000 6.73% - 6.78% 18/09/20 14:53 6.74% 5000 Price 14/09/20 18/09/20 21/09/20
91 DTB 24/12/2020 91 D 12000 3.30% - 3.35% 23/09/20 17:28 3.3578% 12000 Yield 18/09/20 23/09/20 24/09/20
5.70% MHSDL 2024 4 Y 2000 5.75% - 5.76% 15/09/20 15:44 5.70% 3000 Yield 11/09/20 15/09/20 16/09/20
6.70% GJSDL 2030 10 1000 6.63% - 6.68% 22/09/20 16:03 6.70% 1500 Yield 18/09/20 22/09/20 23/09/20
6.67% UKSDL 2030 10 Y 500 6.60% - 6.65% 15/09/20 15:52 6.67% 500 Yield 11/09/20 15/09/20 16/09/20
6.72% RJSDL 2030 10 Y 750 6.63% - 6.68% 22/09/20 15:56 6.72% 750 Yield 18/09/20 22/09/20 23/09/20
6.97% PNSDL 2040 20 Y 600 6.80% - 6.82% 25/09/20 16:51 6.79% 600 Price 18/09/20 22/09/20 23/09/20

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