• 17 JUN
  • Knight Snippet
  • 17/06/2021

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 17-June-2021.

International Market:
- U.S. Treasury yields moved higher on Wednesday after the Federal Reserve released its policy statement and economic projections, showing increased inflation estimates
- FED revised headline inflation estimates to 3.4% for the year, a full 1.00% above its March projection
- Dot plot showed that central bankers expect rate hikes in 2023, a year ahead of prior estimates
- FED reiterated that it expects the price increases to be “transitory”
- US 10-year closed 6 bps up at 1.57% and 30-year closed flat at 2.20% on Wednesday

Crude Oil Market:
- Crude is trading at $73.58/bbl
- Crude short term range: $70-75

Currency Market:
- Dollar index (DXY) is at: 91.40
- DXY today's range: 90.90 - 91.64
- USDCNY or Chinese yuan is at 6.42
- USDINR with a high of 73.38, closed at 73.32
- USDINR range: 73.50 - 73.80
- As the DXY has crossed the strong resistance @ 90.90, we are waiting for couple of days to sustain that level to confirm the bull trend in DXY
- If bull trend is not confirmed, DXY may fall again from 91.40 levels
- USDINR on the other hand, may open weaker due to stronger dollar

Domestic Market:
- Govt bond pricess fell yesterday as traders and investors are waiting for today's G-SAP 1.0 third tranche auction results
- 5.63 GS 2026 closed at 5.67% Vs 5.64% the previous trading day;  
- 5.85 GS 2030 closed at 6.05% Vs 6.04% the previous trading day;
- 5.85 GS 2030 also saw an intra-day low of 6.07%  

16-June-2021 T-Bill Auction cut-offs:
91-day @ 3.47
182-day @ 3.70
364-day @ 3.85

Inference:
Let's look at 19-May-2021's T-Bill cut-offs:
91-day cut-off on 19-May-21 was 3.37% Vs. yesterday's 3.47 --> 10bps up in a month
182-day was @ 3.58% Vs now @ 3.70% --> 12 bps up
364-day was @ 3.72% Vs. now 3.85%  --> 13 bps up

This clearly shows that, in a span of a month, T-Bill cut-offs have increased by 10-13 bps
- We, at Knight Research have already given 4.00% target for 91-day T-Bill by year end
- 364-day T-Bill will cross 4.00% mark by July-Sep quarter itself
- G-SAP 1.0 third tranche auctions are today and all eyes are there on the auction cut-offs
- Knight Research expects 5.85 GS 2030 auction cut-offs @ 6.03%
- Aggressive action by RBI can take the cut-offs @ 5.99%, the exact price where RBI had devolved Rs. 9,975 Cr on PDs
- The sole reason for RBI to give a cut-off @ 5.99% would be to give exit to PDs if at all that is the thought
- If the G-SAP 1.0 third tranche cut-offs are not good, there will again be a minor sell-off in the market
- Knight research will be available to assist you with G-SAP 1.0 third tranche auction cut-offs by 10.40am

Trading Range:
5.85 GS 2030 range: 6.00% - 6.10% range

That's it for today.  You were listening to Knight Snippets with Parthesh Shah from Knight Fintech.

See you on tomorrow with a new episode of Knight Snippets.

Macro Economic Events

Indicator Last Expected AsOn Next
Inflation Rate MoM MAY   [GB] 0.60 0.30 14/06/21 16/06/21
Inflation Rate YoY MAY   [GB] 1.50 0.70 14/06/21 16/06/21
Balance Of Trade MAY   [SG] 5,755 5,414 14/06/21 17/06/21
Foreign Bond Investment   [JP] 410.6 664.8 14/06/21 17/06/21
Foreign Bond Investment APR   [US] 118,900 -65,500 14/06/21 16/06/21
Unemployment Rate MAY   [RU] 5.20 5.40 18/06/21 21/06/21
Loan Prime Rate 5 Y   [CN] 0.0000 0.0000 18/06/21 21/06/21
Balance Of Trade MAY   [JP] 255.3 662.2 14/06/21 16/06/21
Industrial Production YoY MAY   [CN] 9.80 14.10 14/06/21 16/06/21
New Home Sales MAY   [US] 863.0 917.0 18/06/21 23/06/21
Markit composite PMI JUN   [AU] 56.1 58.0 18/06/21 23/06/21
Markit Services PMI JUN   [US] 70.4 64.7 18/06/21 23/06/21
Existing Home Sales MAY   [US] 5,800 5,850 18/06/21 22/06/21
FIXED ASSET INVESTMENT (YTD) YoY MAY   [CN] 19.9 25.6 14/06/21 16/06/21
Loan Prime Rate 1Y   [CN] 3.85 3.85 18/06/21 21/06/21
Stock Investment by Foreigners   [JP] -33.2 94.7 14/06/21 17/06/21
Core Inflation Rate YoY MAY   [SG] 0.80 0.60 18/06/21 23/06/21
EXPORT YoY MAY   [JP] 7,181 7,378 14/06/21 16/06/21
Industrial Production YoY MAY   [CN] 9.80 14.10 14/06/21 16/06/21
New Home Sales MoM MAY   [US] 863.0 917.0 18/06/21 23/06/21
Interest Rate Decision   [BR] 4.25 3.50 14/06/21 17/06/21
Markit Services PMI JUN   [AU] 56.0 58.0 18/06/21 23/06/21
Retail Sales MoM MAY   [AU] 0.1000 1.1000 18/06/21 21/06/21
Unemployment Rate MAY   [AU] 5.10 5.50 14/06/21 17/06/21
Retail Sales YoY MAY   [RU] 34.7 -3.4 18/06/21 21/06/21
PPI Input YoY MAY   [GB] 9.90 10.60 14/06/21 16/06/21
PPI Output MoM MAY   [GB] 111.6 111.1 14/06/21 16/06/21
Employment Change MAY   [AU] 115,200 -30,700 14/06/21 17/06/21
Inflation Rate MoM MAY   [SG] 0.80 -0.20 18/06/21 23/06/21
Inflation Rate YoY MAY   [SG] 2.40 2.10 18/06/21 23/06/21
Core Inflation Rate YoY MAY   [GB] 1.30 1.10 14/06/21 16/06/21
GDP YoY MAY   [RU] 10.7 0.8 18/06/21 21/06/21
Import YoY MAY   [JP] 6,926 6,714 14/06/21 16/06/21
Initial Jobless Claims   [US] 412.0 375.0 14/06/21 17/06/21
Current Account Q1   [US] -188,484 -180,917 18/06/21 23/06/21
Housing Price Index YoY MAY   [CN] 4.90 4.80 14/06/21 17/06/21
PPI MoM May   [RU] 227.2 221.5 14/06/21 17/06/21
Unemployment Rate MAY   [CN] 5.10 5.30 14/06/21 16/06/21
Markit Manufacturing PMI JUN   [AU] 58.4 60.4 18/06/21 23/06/21
Markit Manufacturing PMI JUN   [US] 62.1 60.5 18/06/21 23/06/21
PPI Output YoY MAY   [GB] 3.90 2.30 14/06/21 16/06/21
PPI MoM May   [RU] 227.2 221.5 14/06/21 17/06/21
Existing Home Sales MoM MAY   [US] 5,800 5,850 18/06/21 22/06/21
Markit Composite PMI JUN   [US] 68.7 63.5 18/06/21 23/06/21
Industrial Production YoY MAY   [RU] 7.20 2.30 18/06/21 23/06/21
PPI YoY MAY   [KR] 6.40 6.00 18/06/21 23/06/21
PPI MoM May   [KR] 108.5 108.1 18/06/21 22/06/21

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
6.83% MHSDL 2031 10 Y 1000 6.83% 22/06/21 16:40 6.83% 1500 Yield 17/06/21 22/06/21 23/06/21
7.07% HRSDL 2037 16 Y 2000 7.02% - 7.05% 22/06/21 16:41 7.07% 2000 Yield 17/06/21 22/06/21 23/06/21
91 DTB 16/09/2021 91 DTB 15000 3.42% - 3.44% 16/06/21 14:58 3.4692% 15000 Yield 11/06/21 16/06/21 17/06/21
5.63% GS 2026 5 Y 11000 99.87 - 99.92 18/06/21 19:35 100.11 8221 Price 14/06/21 18/06/21 21/06/21
6.88% UPSDL 2031 10 Y 2500 6.84% 22/06/21 16:42 6.88% 2500 Yield 17/06/21 22/06/21 23/06/21
6.67% GS 2050 30 Y 7000 7.03% - 7.05% 18/06/21 19:33 7.0254% 7000 Yield 14/06/21 18/06/21 21/06/21
7.09% KLSDL 2036 15 Y 1000 7.02% - 7.05% 22/06/21 16:36 7.09% 1000 Yield 22/06/21 22/06/21 22/06/21
6.64% GS 2035 15 Y 10000 99.58 - 99.63 18/06/21 19:34 99.60 12500 Price 14/06/21 18/06/21 21/06/21
182 DTB 16/12/2021 182 D 15000 3.66% - 3.68% 16/06/21 14:59 3.6969% 15000 Yield 11/06/21 16/06/21 17/06/21
7.06% TSSDL 2041 20 Y 1000 - 22/06/21 16:34 7.06% 1000 Yield 17/06/21 22/06/21 23/06/21
6.90% RJSDL 2032 11 Y 1000 6.85% 22/06/21 16:32 6.90% 1000 Yield 17/06/21 22/06/21 23/06/21
6.83% TNSDL 2031 10 Y 1000 6.84% 22/06/21 16:30 6.83% 1000 Yield 17/06/21 22/06/21 23/06/21
182 DTB 23/12/2021 182 D 15000 3.72% - 3.73% 23/06/21 14:14 3.7189% 15000 Yield 18/06/21 23/06/21 24/06/21
6.89% MHSDL 2032 11 Y 1000 6.86% 22/06/21 16:58 6.89% 100 Yield 17/06/21 22/06/21 23/06/21
6.96% TNSDL 2056 35 Y 1000 - 22/06/21 16:56 98.71 1000 Yield 17/06/21 22/06/21 23/06/21
7.06% KLSDL 2041 20 Y 1000 7.02% - 7.05% 22/06/21 17:08 7.06% 1000 Yield 17/06/21 22/06/21 23/06/21
7.04% RJSDL 2036 15 Y 1000 7.02% - 7.05% 22/06/21 17:09 7.04% 1000 Yield 17/06/21 22/06/21 23/06/21
6.89% GASDL 2030 10 Y 100 6.84% 22/06/21 16:45 6.89% 100 Yield 17/06/21 22/06/21 23/06/21
7.06% WBSDL 2036 15 Y 3000 7.02% - 7.05% 22/06/21 16:55 7.06% 3000 Yield 17/06/21 22/06/21 23/06/21
7.13% APSDL 2036 15 Y 1000 7.02% - 7.05% 22/06/21 16:52 7.13% 1000 Yield 17/06/21 22/06/21 23/06/21
91 DTB 23/09/2021 91 D 15000 3.48% - 3.50% 23/06/21 14:13 3.4679% 15000 Yield 18/06/21 23/06/21 24/06/21
364 DTB 16/06/2022 364 D 6000 3.74% - 3.76% 16/06/21 15:00 3.8526% 6000 Yield 11/06/21 16/06/21 17/06/21
7.06% KLSDL 2038 17 Y 500 7.02% - 7.05% 22/06/21 16:54 7.06% 500 Yield 17/06/21 22/06/21 23/06/21
364 DTB 23/06/2022 364 D 6000 3.85%- 3.86% 23/06/21 14:14 3.8851% 6000 Yield 18/06/21 23/06/21 24/06/21

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