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 13-Jan-2021.
International Market:aa
- U.S. Treasury yields consolidating now after 25 bps in 1-month rise
- US 10-year was unchanged at 1.15% and 30-year was also unchanged at 1.88% on Tuesday
- As we have repeatedly said, 1.25% mark is a solid resistance for US 10-year in the medium term and yields have found a new range of 1.10% - 1.20%
Crude Oil Market:
- Crude is at $57.12/bbl; range-bound markets
- Crude short term range: $54-57
- As you know, we are much closer to our $60 target for crude
- One interesting fact: OPEC+ group’s compliance with the oil production cuts fell to 75% in December 2020 — one of the lowest levels since the pact was enacted in May 2020
- This shows the eagerness of the countries to ramp up the production once the demand is back and this would limit the upside on the crude
Currency Market:
- Dollar index (DXY) is at: 89.95
- DXY today's range: 89.64 - 90.25
- As we were skeptical on the strength of DXY, it exactly turned out so and could not hold 90.50 levels and retreated to 90.00
- Now, the dollar movement is pretty uncertain will depend on the equity market performance, new policies, new stimulus bill etc
- USDCNY or Chinese yuan is at 6.46
- USDINR with a high of 73.42, closed at 73.20
- As USDINR could not breach 73.50, now are now looking at 73.10 - 73.40 range
Domestic Market:
- CPI inflation figures are out and are positively surprising, which we were informing you about for the last 2 days
- CPI for December is at 4.59% Vs 6.93% of November
- Majority of the market players were expecting CPI below 5.50%, but no one could expect CPI at 4.59%
- Again, main reasons for this massive fall: Fall in vegetable prices and favorable base effect
What does this 4.59% CPI mean?
- No, we are not looking at the RBI rate cut cycle to start again. There is no possibility of the rate cut in near future
- Rather, this 4.59% CPI gives a comfort to RBI as they can prolong the accommodative stance without worrying about inflation
- I repeat, 4.59% CPI does not mean rate cuts are coming
- Of course, this would be a relief and market sentiments would be positive and we are looking at a good trading day today
- 5.22 GS 2025, closed at 5.15% Vs 5.11 the previous day, marking another 4 bps increase in 5-year paper
- 5.77 GS 2030, closed at 5.93% Vs 5.92% the previous day
- The increase in the shorter-end of the papers was purely because RBI is conducting 14-day variable-rate reverse repo operation to normalize the liquidity conditions
12-Jan-2021 SDL Auction analysis:
- Our call for UP 10-year @ 6.61 turned out to be a success once again
- We will try to sell 6.61 UP 10-year @ 6.59 and below pocketing 2-3bps or 15-20 paisa or Rs. 75,000-Rs. 1 Lakh/lot
After last 9-months success in auctions has taught us a lot and has made a lot of money for our clients.
Has your bank started participating in auctions and minting money? If not yet, do reach out to us on 99 3030 7466 or research@knightfintech.com
That's it for today. You were listening to Knight Snippets with Parthesh Shah from Knight Fintech.
See you tomorrow with the new episode of Knight Snippets.
| Indicator | Last | Expected | AsOn | Next |
|---|---|---|---|---|
| Continuing Jobless Claims [US] | 5,198 | 5,072 | 11/01/21 | 14/01/21 |
| Foreign Exchange Reserves [IN] | 586,082 | 594,582 | 11/01/21 | 15/01/21 |
| Initial Jobless Claims [US] | 790.0 | 787.0 | 11/01/21 | 14/01/21 |
| Core Inflation Rate MoM DEC [US] | 269.3 | 269.9 | 09/01/21 | 13/01/21 |
| Bank Lending YoY DEC [JP] | 6.20 | 6.30 | 09/01/21 | 12/01/21 |
| Interest Rate Decision [KR] | 0.50 | 0.50 | 11/01/21 | 15/01/21 |
| WPI FUEL YOY DEC [IN] | 1.48 | 1.55 | 11/01/21 | 14/01/21 |
| WPI Manufacturing YoY DEC [IN] | 1.48 | 1.55 | 11/01/21 | 14/01/21 |
| Jobless Claims 4 Week Average [US] | 837.5 | 818.8 | 11/01/21 | 14/01/21 |
| WPI Food YoY DEC [IN] | 1.48 | 1.55 | 11/01/21 | 14/01/21 |
| Inflation Rate YoY DEC [IN] | 7.61 | 6.93 | 09/01/21 | 12/01/21 |
| WPI Inflation YoY DEC [IN] | 1.48 | 1.55 | 11/01/21 | 14/01/21 |
| Exports Price YoY DEC [US] | 123.1 | 123.8 | 11/01/21 | 14/01/21 |
| Unemployment Rate DEC [KR] | 4.20 | 4.10 | 09/01/21 | 13/01/21 |
| Stock Investment by Foreigners [JP] | -85.5 | 580.8 | 11/01/21 | 15/01/21 |
| Housing Price Index YoY DEC [CN] | 4.00 | 3.80 | 11/01/21 | 15/01/21 |
| Manufacturing Production YoY NOV [IN] | -0.20 | 3.50 | 09/01/21 | 12/01/21 |
| Inflation Rate YoY DEC [BR] | 3.92 | 4.31 | 09/01/21 | 12/01/21 |
| Business Confidence JAN [BR] | 62.9 | 63.1 | 09/01/21 | 13/01/21 |
| Inflation Rate MoM DEC [US] | 0.20 | 0.00 | 09/01/21 | 13/01/21 |
| Deposit Growth YoY [IN] | 11.3 | 11.5 | 11/01/21 | 15/01/21 |
| Inflation Rate YoY DEC [US] | 1.20 | 1.20 | 09/01/21 | 13/01/21 |
| Exports YoY DEC [KR] | 95.5 | 92.0 | 11/01/21 | 14/01/21 |
| Foreign Bond Investment [JP] | -291.6 | 730.7 | 11/01/21 | 15/01/21 |
| Export Price MoM DEC [US] | 123.1 | 123.8 | 11/01/21 | 14/01/21 |
| Inflation Rate YoY DEC [RU] | 4.40 | 4.90 | 09/01/21 | 12/01/21 |
| Import Price YoY DEC [KR] | 95.6 | 95.8 | 11/01/21 | 14/01/21 |
| Inflation Rate YoY DEC [RU] | 0.70 | 0.80 | 09/01/21 | 12/01/21 |
| Export YoY DEC [CN] | 2,372 | 2,681 | 11/01/21 | 14/01/21 |
| PPI MoM DEC [JP] | 99.9 | 99.9 | 11/01/21 | 14/01/21 |
| PPI YoY DEC [JP] | -2.10 | -2.20 | 11/01/21 | 14/01/21 |
| Core Inflation Rate YoY DEC [US] | 1.60 | 1.60 | 09/01/21 | 13/01/21 |
| Industrial Production YoY NOV [IN] | 0.50 | 3.60 | 09/01/21 | 12/01/21 |
| Import Price MoM DEC [US] | 123.3 | 123.4 | 11/01/21 | 14/01/21 |
| Inflation Rate MoM DEC [BR] | 0.86 | 0.89 | 09/01/21 | 12/01/21 |
| Balance Of Trade DEC [CN] | 584.4 | 754.3 | 11/01/21 | 14/01/21 |
| Bank Loan Growth YoY [IN] | 6.10 | 6.70 | 11/01/21 | 15/01/21 |
| FDI (YTD) YoY DEC [CN] | 1,151 | 1,372 | 11/01/21 | 14/01/21 |
| Import Price YoY DEC [US] | 123.3 | 123.4 | 11/01/21 | 14/01/21 |
| Current Account NOV [JP] | 1,660 | 2,145 | 09/01/21 | 12/01/21 |
| Import YoY DEC [CN] | 1,787 | 1,926 | 11/01/21 | 14/01/21 |
