• 23 FEB
  • Knight Snippet
  • 23/02/2021

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 23-Feb-2021.

International Market:
- Fed chair Jerome Powell is set to address Congress on Tuesday and Wednesday

- We expect the US yields to cool-down a bit after this address

- US 10-year closed 3 bps higher at 1.37% and 30-year closed 5 bps higher at 2.19%

- Still there is no relief and the yield surge is getting a momentum

- Germany’s benchmark 10-year bond yield rose to a fresh 8-month high on Monday, as bets on stronger economic growth and inflation in the months ahead continued to put upward pressure  

- Germany 10-year is now at -0.28%, which usually used to hover around -0.55% to -0.65%

Crude Oil Market:
- The leaders of the OPEC+ alliance, Saudi Arabia and Russia, are reportedly once again at odds over oil supply management ahead of another crucial meeting of the group next week on March 3-4

- OPEC’s top producer and de facto leader Saudi Arabia would likely prefer the March 3-4 meetings to decide that the OPEC+ coalition holds production flat, not easing the cuts  in April

- On the other hand, Russia, will likely be pushing for further easing of the production cuts

- Remember Saudi Arabia had decided to cut their own oil production by 1 mbpd for March and April and let others increase their supply gradually to support the oil prices in the pandemic hit weaker global demand

- Saudi Arabia is expected to use that as "leverage for getting a deal" to make sure the production for April stays flat

- This extra self-declared 1mbpd oil production decrease from Saudi Arabia was one of the main reasons for recent months' Oil Price rally

- Crude is trading at $66.25/bbl

- Crude short term range: $64-67

- Our crude's $70/bbl is on-track

Currency Market:
- Dollar index (DXY) is at: 89.95

- It has finally broken the psychological 90.00 level and is trading below the key level

- DXY today's range: 89.20 - 90.35

- USDCNY or Chinese yuan is at 6.46

- USDINR with a low of 72.29,  closed at 72.49 on Monday

- USDINR range: 72.35 - 72.65

Domestic Market:
- The MPC Policy minutes were released yesterday after market hours and all the members have the following opinions:

#1: Strong economic recovery is underway

#2: Food inflation has bottomed-out and will rise from Apr-June, but we will not have last year type of abnormal food inflation

#3: Accommodative stance has to continue for longer if needed to revive the investment and consumption cycles

#4: Members were also cognizant on the sticky nature of the core inflation (Core inflation is without food and fuel, which are more volatile)

5.15 GS 2025 closed at 5.76% Vs 5.70% the previous trading day; a straight 6bps increase in a single day

5.85 GS 2030 closed at 6.20% Vs 6.13% the previous trading day; a straight 7bps increase in a single day

- Few of the traders have now started taking some small trading positions on the hope that RBI's  stronger intervention will come soon

- The broader range for 5.85 GS 2030 is 6.17 - 6.23;  From a technical stand-point, 6.23% is a strong support for 5.85 GS 2030

- 5.15 GS 2025 @ 5.76 level is super attractive for us for another 10bps gain once the RBI cools-off the market, but we will wait to take a LONG position

Corporate Bonds:

In the primary market

SBI Cards and Payment Services Ltd raised Rs. 550 Cr maturing on Feb 23, 2024, at a coupon of  5.90%

Tata Power Co Ltd has raised Rs. 400 Cr for 3-years at a coupon of 6.18%. It has also raised Rs. 500 Cr maturing in five years at a coupon of 7.05%

- Trade volumes on the secondary markets were low due to yield rising fear

As you all know, we at Knight Research have been very clear in our communication to our clients to manage the duration risk.  

Now, in this uncertain time, duration risk has become the most critical aspect to manage the risk of your treasury.

 

If you have concerns for your provisioning and need some help or need to shield your portfolio from upcoming wave of rising yields, you can 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 a new episode of Knight Snippets.

Macro Economic Events

Indicator Last Expected AsOn Next
Stock Investment by Foreigners   [JP] 330.1 463.2 22/02/21 26/02/21
Bank Loan Growth YoY   [IN] 5.90 6.00 22/02/21 26/02/21
Foreign Direct Investment JAN   [BR] 1,514 739 22/02/21 24/02/21
Current Account   [BR] 202.0 -5,400.0 22/02/21 24/02/21
Jobless Claims 4 Week Average   [US] 833.3 836.8 22/02/21 25/02/21
GDP Growth Rate YoY   [IN] -23.9 -7.5 22/02/21 26/02/21
Foreign Exchange Reserves   [IN] 583,700 6,075,400 22/02/21 26/02/21
Industrial Production MoM JAN   [SG] 2.40 7.50 22/02/21 26/02/21
GDP Growth Rate YoY   [US] 0.0000 4.0000 22/02/21 25/02/21
Current Account JAN   [BR] 202.0 0.0 22/02/21 24/02/21
Loan Prime Rate 1Y   [CN] 3.85 3.85 19/02/21 22/02/21
Pending Home Sales YoY JAN   [US] 16.6 21.4 22/02/21 25/02/21
Private Sector Credit YoY JAN   [AU] 0.30 0.10 22/02/21 26/02/21
Consumer Confidence FEB   [KR] 95.4 89.9 19/02/21 23/02/21
Retail Sales MoM JAN   [JP] -0.80 -2.00 22/02/21 25/02/21
Interest Rate Decision   [KR] 50.0 0.5 22/02/21 24/02/21
Infrastructure Output YoY Jan   [IN] -1.40 -1.30 22/02/21 26/02/21
Housing Price Index YoY JAN   [CN] 4.00 3.80 19/02/21 23/02/21
Inflation Rate YoY JAN   [SG] -10.00 0.00 19/02/21 23/02/21
Retail Sales YoY JAN   [JP] 0.60 -0.30 22/02/21 26/02/21
Government Budget Value   [IN] -10,755 -11,585 22/02/21 26/02/21
Import Price YoY JAN   [SG] 91.8 93.3 22/02/21 26/02/21
Inflation Rate MoM JAN   [SG] 0.40 0.40 19/02/21 23/02/21
Foreign Bond Investment   [JP] 1,029 477 22/02/21 26/02/21
Industrial Production YoY JAN   [SG] 18.7 14.3 22/02/21 26/02/21
Industrial Production YoY JAN   [JP] -3.90 -2.60 22/02/21 26/02/21
Export Price YoY JAN   [SG] 90.4 89.7 22/02/21 26/02/21
Business Confidence FEB   [KR] 85.0 82.0 22/02/21 24/02/21
Private Capital Expenditure QoQ   [AU] -3.00 3.00 22/02/21 25/02/21
Initial Jobless Claims   [US] 848.0 861.0 22/02/21 24/02/21
Core Inflation Rate YoY JAN   [SG] -0.1000 -0.3000 19/02/21 23/02/21
Deposit Growth YoY   [IN] 11.4 11.1 22/02/21 26/02/21
Loan Prime Rate 5 Y   [CN] 0.0000 0.0000 19/02/21 22/02/21
Bank Lending MoM JAN   [BR] 2.10 1.60 22/02/21 24/02/21
Private Sector Credit MoM   [AU] 0.1000 0.3000 22/02/21 26/02/21

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
TSSDL 2041 20 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
7.20% GASDL 2031 10 Y 200 7.08% - 7.15% 23/02/21 15:31 7.20% 200 Yield 18/02/21 23/02/21 24/02/21
RJSDL 2036 15 Y 500 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
7.07% GJSDL 2031 10 Y 1000 7.08% 23/02/21 15:30 7.07% 1000 Yield 18/02/21 23/02/21 24/02/21
JKSDL 2036 15 Y 617 T.B.D T.B.D T.B.D T.B.D Yield 26/02/21 02/03/21 03/03/21
7.08% CHSDL 2029 8 Y 1000 7.00% 7.05% 23/02/21 15:29 7.08% 1000 Yield 18/02/21 23/02/21 24/02/21
7.03% MPSDL 2031 10 Y 3000 7.08% - 7.15% 23/02/21 15:28 7.23% 3000 Yield 18/02/21 23/02/21 24/02/21
KLSDL 2028 7 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
7.35% KASDL 2039 18 Y 1000 7.20% -7.30% 23/02/21 15:27 7.35% 1000 Yield 18/02/21 23/02/21 24/02/21
6.57% TNSDL 2031 10 Y 2500 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
MHSDL 2029 8 Y 750 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
6.22% GS 2035 15 Y 11000 - 01/03/21 12:07 94.60 8868 Price 22/02/21 26/02/21 01/03/21
7.24% ASSDL 2031 10 Y 1000 7.08% - 7.15% 23/02/21 15:49 7.24% 1000 Yield 18/02/21 23/02/21 24/02/21
MGSDL 2031 10 Y 96 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
KASDL 2037 16 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
ASSDL 2024 3 Y 500 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
UPSDL 2.031 10 Y 5000 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
7.23% WBSDL 2041 20 Y 2000 7.20% -7.30% 23/02/21 15:29 7.23% 2000 Yield 18/02/21 23/02/21 24/02/21
6.30% PDSDL 2026 5 Y 150 6.25% - 6.30% 23/02/21 15:33 6.30% 150 Yield 18/02/21 23/02/21 24/02/21
6.70% ASSDL 2027 6 Y 500 6.60% - 6.70% 23/02/21 15:35 6.70% 500 Yield 18/02/21 23/02/21 24/02/21
6.67% GS 2050 30 Y 5000 - 01/03/21 12:06 98.34 2503 Price 22/02/21 26/02/21 01/03/21
7.35% KASDL 2040 19 Y 1000 7.20% -7.30% 23/02/21 15:45 7.35% 1000 Yield 18/02/21 23/02/21 24/02/21
6.95% TNSDL 2031 10 Y 2500 7.08% - 7.15% 23/02/21 15:44 7.16% 2500 Yield 18/02/21 23/02/21 24/02/21
364 DTB 24/02/2022 364 D 8000 3.71% - 3.73% 24/02/21 15:58 3.70% 8000 Yield 18/02/21 24/02/21 25/02/21
HRSDL 2029 8 Y 1500 T.B.D T.B.D T.B.D T.B.D Yield 26/02/21 02/03/21 03/03/21
7.08% MHSDL 2031 10 Y 1000 7.14% 23/02/21 15:43 7.08% 1000 Yield 18/02/21 23/02/21 24/02/21
7.22% KASDL 2038 17 Y 1000 7.20% -7.30% 23/02/21 15:40 7.22% 1000 Yield 18/02/21 23/02/21 24/02/21
91 DTB 27/05/2021 91 D 4000 3.18% - 3.20% 24/02/21 15:56 3.1699% 4000 Yield 18/02/21 24/02/21 25/02/21
7.22% RJSDL 2041 20 Y 500 7.08% - 7.15% 23/02/21 15:39 7.22% 500 Yield 18/02/21 23/02/21 24/02/21
PNSDL 2031 10 Y 1500 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
ASSDL 2031 10 Y 500 T.B.D T.B.D T.B.D T.B.D Yield 26/02/21 02/03/21 03/03/21
MPSDL 2023 2 Y 100 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
7.20% UPSDL 2031 10 Y 4000 7.17% 23/02/21 15:37 7.20% 4000 Yield 18/02/21 23/02/21 24/02/21
7.05% PNSDL 2031 10 Y 500 7.08% - 7.15% 23/02/21 15:51 - 0 Price 18/02/21 23/02/21 24/02/21
7.18% HRSDL 2041 20 Y 1000 7.20% -7.30% 23/02/21 15:36 7.18% 1000 Yield 18/02/21 23/02/21 24/02/21
4.48% GS 2023 3 Y 4000 - 01/03/21 12:08 99.19 1345 Price 22/02/21 26/02/21 01/03/21
KASDL 2038 17 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
7.19% SKSDL 2031 10 Y 100 7.08% - 7.15% 23/02/21 15:38 7.19% 100 Yield 18/02/21 23/02/21 24/02/21
7.20% JHKDL 2035 14 Y 1000 7.20% -7.30% 23/02/21 15:50 7.20% 1400 Yield 18/02/21 23/02/21 24/02/21
RJSDL 2046 25 Y 500 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
7.22% APSDL 2037 16 Y 1314 7.20% -7.30% 23/02/21 15:32 7.22% 1314 Yield 18/02/21 23/02/21 24/02/21
KASDL 2036 15 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 26/02/21 02/03/21 03/03/21
MPSDL 2024 3 Y 3000 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21
7.34% TRSDL 2036 15 Y 142 7.20% -7.30% 23/02/21 15:43 7.34% 142 Yield 18/02/21 23/02/21 24/02/21
182 DTB 26/08/2021 182 D 7000 3.50% - 3.55% 24/02/21 15:57 3.4808% 7000 Yield 18/02/21 24/02/21 25/02/21
RJSDL 2031 10 Y 1000 T.B.D T.B.D T.B.D T.B.D Yield 25/02/21 02/03/21 03/03/21

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