MORNING MARKET UPDATE

MORNING MARKET UPDATE 01 Jun 2018 11:38

CURRENCY UPDATE

Rates (Ask) USD/INR EUR/USD GBP/USD EUR/INR GBP/INR AUD/USD USD/JPY USD/CHF USD/CAD

67.1775 1.1673 1.3271 78.4190 89.1550 0.7542 109.17 0.9885 1.2959

USDINR Forwards (Ask) MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR

276.50 19.00 43.50 66.50 88.25 114.00 136.50 159.75 182.25 203.75 226.00 #NAME?

Market Commentary RUPEE - The Indian rupee was trading higher at 67.2525/67.2625 per dollar against its previous close of 67.4050/67.4150, aided by greenback sales by exporters as traders at some backs returned after a two-day bank strike. India’s economy growing at its fastest pace in seven quarters in January-March also aided gains. Traders await U.S. jobs data due later today. .MAJOR CURRENCIES- The euro seemed set to post its first weekly gain in seven weeks on Friday as worries over Italy's political crisis eased.The euro traded at $1.1692 little changed on the day but keeping intact its recovery from Tuesday's 10-month low of $1.1510.The Canadian dollar stood at C$1.2950 to the U.S. dollar after falling 0.65 percent the previous day.The Mexican peso hit a 15-month low of 20.050 to the dollar on Thursday and last stood at 19.908 per dollar. OTHERS - The Australian and New Zealand dollars fell for a third straight session against the euro on Friday as the common currency got a lift from easing political uncertainty in Italy, while they stayed around recent ranges against the greenback.Trading was cautious as global trade war concerns revived after the United States moved ahead with tariffs on aluminium and steel imports from Canada, Mexico and the European Union, ending the two-month exemption it had given earlier. The Australian dollar was last down 0.3 percent at $0.7542 and is set to end the week barely changed.The euro rose to A$1.5484 against the Australian dollar and was set for its first weekly gain after five successive lossesIn New Zealand, the kiwi dollar was steady at $0.6995, holding on to the previous day's gains when it soared to a three-week high as global risk appetite improved..

Technical Strategy EUR/USD - EUR/USD is currently trading at 1.1668. The pair is currently trading above the support level of 1.1445. The RSI is suggesting steady movement for the pair. For the day, the pair is expected to take support at 1.1445 and the resistance at 1.1849 level. c USD/INR - USD/INR is currently trading at 67.4917. The pair is currently trading below the resistance level of 68.5821. The RSI is suggesting downward movment for the pair. For the day the pair may take support at 66.8052 and take resistance at 68.5821 level.

LIBOR 1M 2M 3M 6M 1Y

USD 2.0007 2.1069 2.3213 2.4738 2.7181

EURO -0.3994 -0.3753 -0.3506 -0.3079 -0.2314

JPY -0.0501 -0.0400 -0.0182 0.0229 0.1135

USD IRS (Ask) 1Y 2Y 5Y 10Y

2.5190 2.6960 2.8350 2.9180

MIFOR (Mid) / OIS (Mid) MIFOR 1Y 2Y 5Y 10Y

6.795 7.215 7.30

OIS 6.83 6.91 7.21 7.30 Source: Thomson Reuters, IDBI Bank Ltd.

Source: Thomson Reuters, IDBI Bank Ltd.

INTERNATIONAL MARKETS Equities, Commodities and Bonds

Equity Markets (% Change)

SENSEX Nifty Dow Jones Nasdaq FTSE CAC DAX Hang Seng Nikkei

35392.79 10747.65 24415.84 7442.12 7678.20 5398.40 12604.89 30456.43 22214.36

0.20 0.11 -1.02 -0.27 -0.15 -0.54 -1.42 -0.04 0.06

Crude/Bullion (In $)

Crude Oil(WTI)

Gold Silver

66.89 1298.30 16.426

FII/MF Cash

(In cr `) -1,835.54 4,655.23 -30,393.24 1,22,883.99 0

FII Cash Flow MF Cash Flow FII CY 2018 MF CY 2018

STOCKS(US & Europe) U.S. stocks fell on Thursday after the United States moved to impose tariffs on metal imports from Canada, Mexico and the European Union, prompting retaliatory measures from some of its trading partners.For the month, however, the S&P 500 Dow Industrials and Nasdaq had their biggest percentage gains since January.The Dow Jones Industrial Average fell 251.94 points, or 1.02 percent, to 24,415.84, the S&P 500 lost 18.74 points, or 0.69 percent, to 2,705.27 and the Nasdaq Composite dropped 20.34 points, or 0.27 percent, to 7,442.12. For the month, the S&P rose 2.16 percent, the Dow added 1.05 percent, and the Nasdaq gained 5.32 percent.

STOCKS(Asia) Asian equities shook off earlier weakness on Friday, as a softer yen supported Japanese stocks and firm export data drove South Korean markets higher, although rekindled concerns about U.S. protectionist trade policies limited gains..MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.1 percent but the index was still down roughly 0.6 percent for a week in which it touched a six-week low on concerns about political developments in Italy.In China, stocks were volatile, with the long-awaited inclusion of big cap shares from the country in MSCI's emerging markets index failing to buoy the market or attract any immediate flows of foreign money. The Shanghai Composite Index fell 0.3 percent and the blue-chip CSI300 index dropped 0.55 percent. OIL U.S. crude oil lost more ground on Friday, with the market set for a second week of decline on pressure from record U.S. production and expectations of higher OPEC output.U.S. West Texas Intermediate crude had dropped 13 cents, or 0.2 percent, to $66.91 a barrel by 0210 GMT, after falling almost 2 percent on Thursday. Brent crude which was little changed in the previous session, lost 6 cents, or 0.1 percent, to $77.50 per barrel.U.S. crude production has been rising to record-high levels since late last year. In March it jumped 215,000 barrels per day (bpd) to 10.47 million bpd, a new monthly record, the Energy Information Administration (EIA) said on Thursday. GOLD Gold prices edged higher on Friday as concerns over a global trade war increased after the United States imposed tariffs on steel and aluminum imports from Canada, Mexico and the European Union.Spot gold was up 0.1 percent at $1,299.51 per ounce by 0110 GMT.

Money Rates CALL Rate O/N Mibor LAF (cr `) 91 - T Bill 1y G Sec 5y G Sec 10y G sec

6.05 6.05 -46.00 6.44 7.174 7.877 7.866

BONDS (U.S.) U.S. Treasury yields on the long end of the curve fell on Thursday after the United States slapped tariffs on steel and aluminum imports from the European Union, Canada and Mexico, rekindling fears of a trade war.U.S. 10-year note and 30-year bond yields, which move inversely to prices, have fallen in five of the last six sessions, reversing an uptrend that has been in place for the last couple of months..In afternoon trading, U.S. 10-year yields fell to 2.831 percent from Wednesday's 2.844 percent.U.S. 30-year yields dropped to 2.992 percent from 3.017 percent late on Wednesday.On the short end of the curve, however, U.S. 2-year yields were up at 2.419 percent from Wednesday's 2.411 percent.

INBMK 4Y 7Y 10Y

Indian Money Market 7.875 8.014 7.866

US Treasury 3Y 5Y 7Y 10Y

2.561 2.7045 2.8155 2.8676

CALL- India's three-day cash rate was trading at 6.00%/6.05%, against 6.05%/6.10%, at its previous close for one-day loans. BONDS- The benchmark 10-year bond was trading lower at 95.42 rupees, yielding 7.86%, against 95.62 rupees and a 7.83% yield at the previous close, as a sharp jump in January-March GDP growth increased bets of rate hike soon, even as traders remain on the sidelines ahead of fresh debt supply. .

IRS- The one-year swap rate trading was two basis points higher at 6.82% from 6.80% at previous close, while the benchmark five-year swap rate was also up two basis points at 7.20%.

ECONOMIC INDICATORS Economic data/Indicators EUR Euro-Zone Consumer Price Index Core (YoY) (MAY A) CAD Gross Domestic Product (YoY) (MAR)

ACTUAL 1.10% 2.90%

EXPECTED

PREVIOUS

1.00% 2.90%

0.70% 3.00%

Euro zone inflation jumped by far more than expected in May on higher energy costs, bringing relief to the European Central Bank after market turbulence that has jeopardised its planned exit from a lavish stimulus programme. Inflation in the 19 countries sharing the euro rose to 1.9. percent from 1.2 percent in April, EU statistics office Eurostat said on Thursday Canada's economy grew at an annualized rate of 1.3 percent in the first quarter, weighed by a deceleration in household spending, lower exports of non-energy products, and a decline in household investment, Statistics Canada said on Thursday.

Upcoming Economic Data/Events ACTUAL CHF PMI Manufacturing (MAY) USD Unemployment Rate (MAY)

EXPECTED

PREVIOUS

62.50 3.90%

63.60 3.90%

Currency Futures & Options Instrument* Futures Options Futures Options Futures Options Futures Options Abhijit Mishra

Underlying USDINR USDINR GBPINR GBPINR EURINR EURINR JPYINR JPYINR Total

Volume 5,85,179 6,25,505 34,612 632 22,211 893 9,924 1 12,78,957

Value (in cr) 3,916.52 4,243.72 310.00 5.69 174.62 7.17 61.05 0.01 8,718.78

OI 30,09,604 15,95,154 53,697 1,332 1,01,535 4,273 28,794 1,530 47,95,919

No. of trades 18,317 18,625 3,992 42 2,601 105 1,277 1 44,960

Volume 5,42,227 20,544 33,094 9,319

Value (in cr) 3,654.15 161.48 295.97 57.10

OI 24,10,420 73,445 48,414 25,011

No. of trades 15,796 2,315 3,659 1,175

[email protected]

91-22-66263510

Contract* USDINR 270618 EURINR 270618 GBPINR 270618 JPYINR 270618

LTP 67.3900 78.8225 89.52 61.85

Disclaimer : This report/ material has been prepared by IDBI Bank Limited (“IDBI Bank”) and is only meant for the recipient for use as intended and not for circulation. This

Disclaimer : This report/ material has been prepared by IDBI Bank Limited (“IDBI Bank”) and is only meant for the recipient for use as intended and not for circulation. This document and its contents are strictly confidential and may not be retransmitted, distributed, published, reproduced (in whole or in part) by any medium or in any form, or disclosed or made available by recipients to any other person. The information contained herein is collected from public domain or sources believed to be reliable and IDBI Bank has not independently verified it. While reasonable care has been taken to ensure that the information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of the research, it cannot be guaranteed, warranted or represented that it is accurate or complete and it should not be relied upon. This report/material has been prepared solely for informational purposes and does not constitute or form part of, and should not be construed as, an offer to sell, or as an invitation or inducement to make, or a solicitation of, any offer to purchase or subscribe for any securities investment products or other financial product or service, or an official confirmation of any transaction. No part of this report/material should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. It is clarified that the information contained herein is preliminary, limited in nature and subject to verification, completion and amendment. No representation or warranty, express or implied, is given or made by any person in relation to the fairness, accuracy, completeness or reliability of the information or any opinions contained herein and no reliance whatsoever should be placed on such information or opinions. This report/material, should not be regarded by recipients as a substitute for the exercise of their own judgment and assessment. Any opinions expressed in this material are subject to change without notice and neither IDBI Bank nor any other person is under any obligation to update or keep current the information contained herein. Neither IDBI Bank, nor its advisors nor any of their respective affiliates, agents, directors, partners and employees shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this report/material or its contents or otherwise arising in connection with this report/material. This report/material contains certain tables and other statistical information and analyses (the “Statistical Information”). Numerous assumptions were used in preparing the Statistical Information, which may or may not be reflected herein. As such, no assurance can be given as to the Statistical Information’s accuracy, appropriateness or completeness in any particular context; nor as to whether the Statistical Information and/or the assumptions upon which they are based reflect present market conditions or future market performance. The Statistical Information should not be construed as either projections or predictions or as legal, tax, financial or accounting advice. This report/material may contain statements about future events and expectations that are forward-looking statements. Any statement in this report/material that is not a statement of historical fact is a forward-looking statement that is based on various assumptions and involves unknown risks and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The recipient may have to make its own independent investigation and appraisal of the the market condition and environment and no reliance may be placed upon the information herein for such purposes. Recipients should consult with their own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that they deem it necessary, and make their own investment, hedging and trading decisions based upon their own investigation and judgment and advice from such advisers as they deem necessary and not upon any view expressed in this material. Nothing in this document constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. By reviewing this material you acknowledge and agree to be bound by the foregoing.