• 13 JAN
  • Knight Snippet
  • 13/01/2021

Transcript

Good Morning Treasurers,

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

Here is 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.

Macro Economic Events

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

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
6.64% MZSDL 2031 11 90 6.62% 12/01/21 14:55 6.64% 90 Yield 07/01/21 12/01/21 13/01/21
91 DTB 14/04/2021 91 D 4000 3.25% - 3.30% 13/01/21 15:19 3.2799% 4000 Yield 08/01/21 13/01/21 14/01/21
6.64% SKSDL 2030 10 Y 204 6.56% - 6.63% 12/01/21 14:56 6.64% 204 Yield 07/01/21 12/01/21 13/01/21
6.67% GS 2050 30 Y 5000 6.52% - 6.54% 15/01/21 11:30 T.B.D T.B.D Yield 11/01/21 15/01/21 18/01/21
6.57% TNSDL 2030 10 Y 2000 6.56% 12/01/21 14:56 6.57% 2000 Yield 07/01/21 12/01/21 13/01/21
MGSDL 2030 10 Y 106 T.B.D T.B.D T.B.D T.B.D Yield 14/01/21 19/01/21 20/01/21
UPSDL 2030 10 Y 3000 T.B.D T.B.D T.B.D T.B.D Yield 14/01/21 19/01/21 20/01/21
6.63% APSDL 2036 16 Y 1000 - 12/01/21 14:57 6.63% 1000 Yield 07/01/21 12/01/21 13/01/21
GASDL 2030 30 Y 100 T.B.D T.B.D T.B.D T.B.D Yield 14/01/21 19/01/21 20/01/21
182 DTB 14/07/2021 182 D 7000 3.42% - 3.45% 13/01/21 15:18 3.4507% 7000 Yield 08/01/21 13/01/21 14/01/21
6.63% PNSDL 2030 10 Y 500 6.57% 12/01/21 14:58 6.63% 500 Yield 07/01/21 12/01/21 13/01/21
WBSDL 2035 15 Y 3000 T.B.D T.B.D T.B.D T.B.D Yield 14/01/21 19/01/21 20/01/21
UPSDL 2030 10 Y 3000 T.B.D T.B.D T.B.D T.B.D Yield 14/01/21 19/01/21 20/01/21
TSSDL 2040 20 Y 750 T.B.D T.B.D T.B.D T.B.D Yield 14/01/21 19/01/21 20/01/21
6.61% RJSDL 2030 10 Y 1000 6.56% 12/01/21 14:54 6.61% 1000 Yield 07/01/21 12/01/21 13/01/21
5.97% CHSDL 2026 6 Y 1000 5.95% - 5.96% 12/01/21 14:53 5.97% 1000 Yield 07/01/21 12/01/21 13/01/21
4.48% GS 2023 3 Y 6000 99.90 - 99.95 15/01/21 11:31 T.B.D T.B.D Price 11/01/21 15/01/21 18/01/21
6.63% WBSDL 2040 20 Y 2000 6.65% - 6.70% 12/01/21 14:52 6.63% 2000 Yield 07/01/21 12/01/21 13/01/21
MPSDL 2036 16 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 14/01/21 19/01/21 20/01/21
ASSDL 2024 4 Y 500 5.40% - 5.42% 12/01/21 15:02 - 0 Yield 07/01/21 12/01/21 13/01/21
BRSDL 2025 5 Y 2000 T.B.D T.B.D T.B.D T.B.D Yield 14/01/21 19/01/21 20/01/21
KASDL 2036 16 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 14/01/21 19/01/21 20/01/21
ASSDL 2030 10 Y 500 6.56% - 6.63% 12/01/21 15:02 - 0 Yield 07/01/21 12/01/21 13/01/21
6.61% UPSDL 2030 10 Y 2500 6.61% 12/01/21 15:01 6.61% 2500 Yield 07/01/21 12/01/21 13/01/21
5.72% BRSDL 2025 5 Y 2000 5.40% - 5.42% 12/01/21 14:59 5.72% 2000 Yield 07/01/21 12/01/21 13/01/21
364 DTB 12/01/2022 364 D 8000 3.56% - 3.60% 13/01/21 15:17 3.5790% 8000 Yield 08/01/21 13/01/21 14/01/21
KASDL 2032 12 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 14/01/21 19/01/21 20/01/21
6.22% GS 2035 15 Y 9000 98.70 - 98.75 15/01/21 11:32 T.B.D T.B.D Price 11/01/21 15/01/21 18/01/21

Credit Research: Exposures and Next IP Dates

Bharat Oman Refineries Ltd.

Non Convertible Debenture

NHPC Ltd.

Bonds/Debentures

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