• 18 JUN
  • Knight Snippet
  • 18/06/2021

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 18-June-2021

International Market:
- The key 10-year Treasury yield dipped Thursday as investors digested the Federal Reserve’s policy update and a big sell-off in commodities
- China announced plans on Wednesday to release industrial metals from its national reserves to curb commodity prices
- The notice came as Beijing struggles to cool a surge in metal prices this year fueled by a post-pandemic economic recovery, ample global liquidity and speculative buying that has dented manufacturers’ margins as manufacturers have found it hard to transfer these costs to the end-users
- With this action, the raw material prices can cool down, which can in turn decrease the acceleration in inflation, and hence the sell-off was seen in US treasuries as well
- US 10-year closed 5 bps down at 1.52% and 30-year closed 9 bps down at 2.11% on Thursday

Crude Oil Market:
- Crude is trading at $72.73/bbl
- Crude short term range: $70-75

Currency Market:
- Dollar index (DXY) is at: 91.86
- DXY today's range: 90.90 - 92.00
- The current strength in dollar index suggest a move towards 92.50, but be aware of global uncertainties
- USDCNY or Chinese yuan is at 6.45
- USDINR with a low of 73.57, closed at 74.08
- USDINR range: 73.90 - 74.30
- USDINR weakness will continue on the back of stronger dollar

Domestic Market:
- The much awaited G-SAP 1.0 third tranche concluded yesterday with a twist
Let's understand G-SAP 1.0 third tranche auction cut-offs:
RBI did not accept the any of the following securities
6.97 2026
6.79 2027
7.59 2029
-  Now, For 6.64 GS 2035, RBI accepted bids worth Rs. 5,882 Cr @ 6.65%

The cut-off yield was as expected for 6.64 2035 but the amount was too far less than market wide expectations

On the other hand, for 5.85 GS 2030, RBI accepted whopping Rs. 26,779 Cr @ 5.99%

- Remember, we had warned you on the podcast yesterday the only reason RBI would accept at 5.99 would be to give an exit to PDs for the devolvement at 5.99
- By accepting Rs. 26,779 Cr @ 5.99%, the message from RBI is loud and clear that they are not ready to let to 6.00% yet

Did you know that:
#1: 5.85 GS 2030 outstanding is Rs. 1.19 Lakh cr
#2: RBI holds almost 75%+ in this paper making shorts almost impossible for the rest?

With larger than expected 5.85 purchases,  yields on secondary also came down

- 5.85 GS 2030 closed at 6.02% Vs 6.04% the previous trading day;
- 5.63 GS 2026 closed at 5.66% Vs 5.64% the previous trading day;  

Now, there is a G-Sec auction today for 5.63 GS 2026 and 6.64 GS 2035.
5.63 GS 2026 @ 5.66% is a good level for investors, and may sail through easily
But, 6.64 GS 2035 @ 6.65% after yesterday's lower acceptance by RBI do pose some challenges.

Trading Range:
As the fears have come down after RBI's large purchase, 5.85 GS 2030 range: 6.00% - 6.05% range

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

See you next Monday with a new episode of Knight Snippets.

Macro Economic Events

Indicator Last Expected AsOn Next
Foreign Exchange Reserves   [IN] 608,081 605,010 21/06/21 25/06/21
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
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
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
Core CPI YoY JUN   [JP] 0.0000 0.0000 21/06/21 25/06/21
Industrial Profits YoY MAY   [CN] 2,594,350 1,825,380 21/06/21 25/06/21
CPI YoY JUN   [JP] 101.7 101.4 21/06/21 25/06/21
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
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
Business Confidence Ju   [KR] 98.0 96.0 21/06/21 25/06/21
Industrial Production YoY M   [SG] 30.0 2.3 25/06/21 25/06/21
Employment Change MAY   [AU] 115,200 -30,700 14/06/21 17/06/21
PCE Price Index YoY MAY   [US] 114.1 113.4 21/06/21 25/06/21
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
GDP YoY MAY   [RU] 10.7 0.8 18/06/21 21/06/21
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
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
Current Account MAY   [BR] 5,660 -4,000 21/06/21 25/06/21
PPI MoM May   [RU] 227.2 221.5 14/06/21 17/06/21
Federal Tax Revenues MAY   [BR] 156,822 137,930 21/06/21 25/06/21
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 MoM MAY   [SG] 7.20 -0.40 21/06/21 25/06/21
Industrial Production YoY MAY   [RU] 7.20 2.30 18/06/21 23/06/21
Corporate Profit APR   [RU] 4,990 3,116 21/06/21 25/06/21
PCE Price Index MoM MAY   [US] 114.1 113.4 21/06/21 25/06/21
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
4.26% GS 2023 20 Y 3000 99..98 - 100.00 25/06/21 17:42 100.1740 3000 Price 21/06/21 25/06/21 28/06/21
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
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
6.76% GS 2061 40 Y 9000 7.05% - 7.07% 25/06/21 17:41 7.0961% 9048 Yield 21/06/21 25/06/21 28/06/21
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
5.85% GS 2030 10 Y 14000 98.68 - 98.72 25/06/21 17:40 - 0 Yield 21/06/21 25/06/21 28/06/21
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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REC Ltd.

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The Ramco Cements Ltd.

Debenture

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