Good Morning Treasurers,
This is your host Priyancka Mahore, from of Knight Fintech and you are listening to Knight Snippets.
Here is what you need to know before going into trade for 21-Sept-2022.
US 10 year at almost at 3.55% yesterday rates were at 3.569%, the highest levels since April 2011. US 2 year at 3.95% today FED policy outcome will come around at 11.30 pm. 75 bps rate hike is already factored in Yields .100 bps rate hike probability is increasing.
If FED hikes rate by 100 bps. then market will react negatively but comments on Future rates will decide the direction of market ,if FED halts or sounds less hawkish then market will become positive. Recession possibility increases and hence traders will move the market on fear.
If FED hikes rates by 75 bps then market will become slightly positive on less aggressive stance of FED.
Crude oil Market:
Brent Crude is at 90.92
FED rate hike will tighten monetary conditions in the U.S., which is expected to weigh on economic activity and in turn on oil demand so due to recession fears Oil prices are giving comfort.
A stronger dollar also weighs on overseas crude demand by making oil imports more expensive. Major importers India and Indonesia in particular have faced pressure on their crude consumption from a stronger dollar.
Data from the American Petroleum Institute (API), released on Tuesday, also showed some weakness in crude demand among U.S. consumers.
The dollar rose in anticipation of the hike.
Dollar Index is at 109.99 at 110 level Builds pressure on other currencies but USDINR is in range bound and trading at 79.83 . Rupee has not depreciated as other currencies did due to good foreign inflow and Lower oil prices. 100 bps rate hike will lead rupee to touch at 80.
USD INR short term range is 79.40 to 80.05
Domestic Debt Side
Earlier session of the market was positive but later on Selling pressure came ahead of FED policy and yields rose.10 year yield closed at 7.29% market also reacted on OIS market 1 year OIS closed at 6.74 vs earlier closing of 6.67 and 5 year OIS was closed 10 bps higher than previous closing at 6.73 you can notice that yield curve is flattening. 5 year 7 year and 10 year are almost at similar levels.
Rate hike impact wil be more on short term securities, hence yields rose in short term and future softening is expected due to cool down in inflation hence long term bond yields have not increased that much. can take short term positions in HTM as yields are attractive and consider this as FD investments for 4 or 5 year at 7.25 with highest safety.
SDL yields and corporate bond yields are not attractive at current levels. will meet you tomorrow with updates on FED policy.
That's it for today.
See you tomorrow with the new episode from Knight Snippets.
|FX Reserves USD [IN]||553.1||550.9||17/09/22||23/09/22|
|Industrial Production (MoM) (Aug) [SG]||-8.00||-2.30||17/09/22||23/09/22|
|Bank Loan Growth [IN]||15.3||15.5||17/09/22||23/09/22|
|Trade Balance (MoM) (Aug) [NZ]||-1,102||-1,092||17/09/22||22/09/22|
|Core Retail Sales (MoM) (Jul) [CA]||1.90||0.80||17/09/22||23/09/22|
|PPI (YoY) (Aug) [RU]||11.3||6.1||17/09/22||21/09/22|
|Services PMI (Sep) [JP]||49.5||51.9||23/09/22||26/09/22|
|Imports (Aug) [NZ]||7.38||7.77||17/09/22||22/09/22|
|CPI (YoY) (Aug) [SG]||6.70||7.00||17/09/22||23/09/22|
|House Price Index (YoY) (Jul) [US]||18.3||16.2||24/09/22||27/09/22|
|CORE CPI (YoY) (Aug) [SG]||4.40||4.80||17/09/22||23/09/22|
|Wholesale Sales (MoM) [CA]||0.20||0.60||17/09/22||23/09/22|
|Retail Sales (MoM) (Aug) [AU]||0.20||1.30||26/09/22||28/09/22|
|Exports (Aug) [NZ]||6.27||6.68||17/09/22||22/09/22|
|Manufacturing PMI (Sep) [JP]||51.5||51.0||23/09/22||26/09/22|
|Goods Trade Balalnce (Aug) [US]||-98.6||-98.5||26/09/22||28/09/22|
|Trade Balance (YoY) (Aug) [NZ]||-10,940||-11,640||17/09/22||22/09/22|
|Industrial Production (YoY) (Aug) [SG]||2.60||0.60||17/09/22||23/09/22|
|M3 Money Supply [IN]||8.40||8.90||17/09/22||21/09/22|
|CPI (YoY) (Aug) [CA]||8.10||7.60||17/09/22||20/09/22|
|Trade Balance [HK]||-68.5||-27.6||23/09/22||26/09/22|
|Service PMI (Sep) [US]||47.3||43.7||17/09/22||23/09/22|
|Retail Sales (Mom) (Jul) [CA]||2.30||1.10||17/09/22||23/09/22|
|Conference Board Consumer Confidence (Sep) [US]||95.3||97.9||24/09/22||27/09/22|
|GDP Monthly (YoY) [RU]||-4.90||-5.50||26/09/22||28/09/22|
|Federal Tax Revenue [BR]||181.0||202.6||24/09/22||27/09/22|
|Unemployment Rate (Aug) [RU]||3.90||4.10||26/09/22||28/09/22|
|Service PMI [GB]||52.6||50.9||17/09/22||23/09/22|
|CORE CPI (YoY) (Aug) [CA]||6.20||6.10||17/09/22||20/09/22|
|CORE CPI (MoM) (Aug) [CA]||0.30||0.50||17/09/22||20/09/22|
|M3 Money Supply (YoY) (Aug) [EU]||5.70||5.60||24/09/22||27/09/22|
|Leading Index [JP]||100.3||99.6||26/09/22||28/09/22|
|CPI (MoM) (Aug) [CA]||0.70||0.10||17/09/22||20/09/22|
|PPI (MoM) (Aug) [RU]||-4.10||-2.20||17/09/22||21/09/22|
|US Leading Index (MoM) (Aug) [US]||-0.70||-0.40||17/09/22||22/09/22|
|Deposit Growth [IN]||8.80||9.50||17/09/22||23/09/22|
|Service PMI [AU]||50.9||50.2||17/09/22||23/09/22|
|FOMC Press Conference [US]||0.0000||0.0000||17/09/22||22/09/22|
|Industrial Production (YoY) (Aug) [SG]||0.80||-0.60||23/09/22||26/09/22|