Global risk sentiment is holding up. The Dow ended the session flat yesterday. The Dollar continues to remain under pressure and has weakened overnight as short term rates remain anchored and higher inflation expectations keep US real rates under pressure.
The Euro has followed up on post NFP rebound, breaching 1.21 and the Sterling too is threatening to break the upper end of its recent trading range of 1.3850. A move towards 1.42 on the Sterling looks possible.
Onshore the tight intraday trading ranges in Rupee continue. The forward curve has been majorly compromised on account of the RBI trying to manage to juggle multiple objectives. The 1y forward yield yesterday touched 5.13% as the RBI continues to buy Dollars in spot and push the purchases forward.
We expect the Rupee to open around 72.85 and trade a 72.80-73.00 range intraday. The Nifty reversed intraday yesterday. Domestic bonds had opened weak yesterday on the announcement of an additional Gsec auction to make for the auction that had got cancelled on Friday. Ahead of the Lunar New year holidays, data sets released by China show that factory activity grew at the slowest pace in five months in January, reflecting the outbreak’s impact on production as well as services including logistics and transportation as the country sought to contain COVID-19.
US Jan CPI is the major data to track today.
Strategy: Exporters are advised to cover a part of their exposure on upticks to 73.40-73.50. Importers are advised to cover through options. The 3M range for USDINR is 72.50 – 74.40 and the 6M range is 73.00 – 76.00.
This report has been prepared by IFA Global. IFA Global shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. IFA Global nor any of directors, employees, agents or representatives shall be held liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. No liability whatsoever is accepted for any loss arising (whether direct or consequential) from any use of the information contained in this report. This statement, prepared specifically at the addressee(s) request is for information contained in this statement. All market prices, service taxes and other levies are subject to change without notice. Also the value, income, appreciation, returns, yield of any of the securities or any other financial instruments mentioned in this statement are based on current market conditions and as per the last details available with us and subject to change. The levels and bases of, and reliefs from, taxation can change. The securities / units / other instruments mentioned in this report may or may not be live at the time of statement generation. Please note, however, that some data has been derived from sources that we believe to be reliable but is not guaranteed. Please review this information for accuracy as IFA Global cannot be responsible for omitted or misstated data. IFA Global is not liable for any delay in the receipt of this statement. This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IFA Global to any registration or licensing requirements within such jurisdiction. The information given in this report is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. IFA Global reserves the right to make modifications and alterations to this statement as may be required from time to time. However, IFA Global is under no obligation to update or keep the information current. Nevertheless, IFA Global is committed to providing independent and transparent information to its client and would be happy to provide any information in response to specific client queries. Neither IFA Global nor any of its directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. The information provided in these report remains, unless otherwise stated, the copyright of IFA Global. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright IFA Global and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders.