IGI Logo

Market Roundup

Spot USDINR little changed at 83.3587 and India’s 10-year yields fell 2bps to 7.24%, on Thursday. The Implied opening from forwards suggests spot may start trading around 83.32 from the previous close of 83.36. The pair is expected to trade in a narrow range ahead of the RBI monetary policy decision.

The RBI is set to hold its key rate at 6.5% for a fifth straight meeting and keep its “withdrawal of accommodation” stance, indicating rates will remain higher for longer. Markets anticipate a hawkish undertone to the central bank's guidance, with a focus on inflation and liquidity management. Any surprise move from the RBI could lead to a surge in volatility. However, the spot USDINR is expected to stay within the range of 83.50 to 83.20. Market participants brushed off a drop in recurring jobless claims ahead of key nonfarm payrolls on Friday with positioning suggesting markets are primed for job gains to be less than estimated. Data showed continuing applications for US jobless benefits fell by the most since July.

The NFP whisper number of 170k is below economist estimates of 185k. The Nasdaq 100 rose more than 1% and the S&P 500 halted a three-day drop. Elsewhere, Oil prices rose in early trade but were on track to fall 6% for the week, hovering near six-month lows, with investors fretting about weak energy demand in Asia combined with high U.S. crude production.

US Treasuries saw small moves, with the 10-year yield up about 4bps at 4.14% after earlier climbing on hawkish signals from the Bank of Japan. The BOJ indication drove the yen up about 2.5%.

USDINR

Technical Observations:

USDINR Dec fut. formed a bullish candle following a Doji Candlestick pattern, indicating bullishness.

However, the pair has oscillated between 83.50 to 83.25 since midNovember.

Momentum Oscillator, RSI of 14 days period is almost flat and is placed above 50, on the daily chart.

Long buildup has been seen as price and open interest gained.

Short Term Trend: Neutral/sideways Expected Trading Range: 83.25 to 83.60 Intraday Recommendation: Buy USDINR Dec. fut. between 83.42 to 83.34 SL 83.28 Target 83.60

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337