MORNING MARKET UPDATE

MORNING MARKET UPDATE 31 May 2018 11:06

CURRENCY UPDATE

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

67.4400 1.1682 1.3315 78.7950 89.8100 0.7572 108.73 0.9883 1.2862

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

272.00 19.50 42.50 65.00 86.00 111.00 133.25 156.25 178.25 199.50 221.50 #NAME?

Market Commentary RUPEE - The Indian rupee was higher at 67.37/67.38 per dollar, against its previous close of 67.4275/67.4375, tracking gains in most Asian currencies amid a rebound in risk assets, as a sell-off trigged by Italian political crisis eased. .MAJOR CURRENCIES- The euro won a reprieve on Thursday, holding on to the strong gains it made on Wednesday, as Italian leaders moved to mitigate political turbulence and avoid a potentially disruptive early election.The dollar shed 0.3 percent to 108.60 yen on Thursday morning, edging back towards Tuesday's five-week low of 108.115 yen. Month-end dollar selling from Japanese exporters is also seen as behind the dollar's fall, market participants said. OTHERS - The Australian dollar bounced off key chart support on Thursday but stayed trapped in a narrow band, while its New Zealand counterpart hovered near a three-week top as global risk appetite improved amid signs of easing political turmoil in Italy. The Australian dollar hopped above a closely-watched 20-day moving average of $0.7526 to as high as $0.7581 in early deals.The New Zealand dollar came off its highs after the data to be last at $0.6982. The currency surged 1.3 percent overnight for its best single-day performance since mid-December to $0.6998, a level not seen since early May.

Technical Strategy EUR/USD - EUR/USD is currently trading at 1.1662. 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 1.1834 level. c USD/INR - USD/INR is currently trading at 67.6409. The pair is currently trading below the resistance level of 68.5821. The RSI is suggesting steady 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 1.9825 2.0968 2.3003 2.4669 2.7000

EURO -0.4009 -0.3753 -0.3513 -0.3071 -0.2314

JPY -0.0398 -0.0336 -0.0140 0.0255 0.1152

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

2.4840 2.6520 2.7960 2.8820

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

6.715 7.135 7.22

OIS 6.805 6.885 7.185 7.26 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

35018.90 10648.20 24667.78 7462.45 7689.57 5427.35 12783.76 30309.79 22183.18

0.32 0.32 1.26 0.88 0.74 -0.20 0.92 0.84 0.74

Crude/Bullion

STOCKS(US & Europe) U.S. stocks ended higher on Wednesday, and the S&P 500 and Dow registered their biggest daily percentage gains since May 4, on signs of easing political turmoil in Italy and as a surge in oil prices boosted energy stocks.The S&P 500's gains erased the losses of Tuesday, when the index posted its first 1 percent drop in May. Fears about instability in Italy and the possibility of the country's exit from the euro sent investors piling into safety assets on Tuesday.The Dow Jones Industrial Average rose 306.33 points, or 1.26 percent, to 24,667.78, the S&P 500 gained 34.15 points, or 1.27 percent, to 2,724.01, and the Nasdaq Composite added 65.86 points, or 0.89 percent, to 7,462.45. STOCKS(Asia) Asian stocks rebounded from a two-month trough on Thursday, while the euro enjoyed a respite after sinking to its lowest in 10 months as political turmoil in Italy that had roiled global financial markets showed signs of easing MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.56 percent after slumping to its weakest since the start of April on Wednesday.The Shanghai Composite Index rose 0.9 percent after data showed China's factory growth in May accelerated strongly and well above forecasts to an eight-month high. Overnight, the Dow rose 1.25 percent and the S&P 500 climbed 1.27 percent.

(In $)

Crude Oil(WTI)

Gold Silver

68.15 1304.39 16.547

FII/MF Cash

(In cr `) 578.91 1,772.53 -28,557.70 1,13,735.19 0

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

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

6.00 6.00 8307.00 6.41 7.206 7.854 7.833

OIL Shanghai September crude oil futures rose 2.2 percent by the midday break on Thursday as investors took more bullish bets on a weaker yuan and following a rally in global oil prices. The front-month contract on the exchange was at 473.6 yuan ($73.92) per barrel at the end of the morning session. GOLD Gold prices edged higher on Thursday, as the dollar eased from 6-1/2-month highs hit earlier this week, with prices further supported by concerns over U.S.China trade. Spot gold was up 0.1 percent at $1,302.50 per ounce by 0344 GMT. It was headed for a monthly decline of about 1 percent, its biggest since February.U.S. gold futures for June delivery were 0.1 percent higher at $1,303.20 per ounce. BONDS (U.S.) U.S. Treasury yields rose on Wednesday, reversing sharp losses the previous session fueled by the Italian political crisis, as financial markets stabilized after Italy sought to end its turmoil with a plan for a new government.U.S. benchmark 10-year yields, which move inversely to prices, had posted their largest oneday drop in nearly two years on Tuesday, while those on two-year notes had their largest daily fall in more than nine years .

INBMK 4Y 7Y 10Y

Indian Money Market 7.846 8.042 7.833

US Treasury 3Y 5Y 7Y 10Y

2.5364 2.6777 2.7958 2.8459

CALL- India's one-day cash rate was at 5.95%/6.00% against 6.00%/6.05% at previous close. BONDS- The benchmark 10-year bond was at a one-week low of 95.57 rupees, yielding 7.83%, versus 95.90 rupees and 7.78% yield at the previous close, tracking sharp overnight gains in crude oil prices. .

IRS- The one-year swap rate was up four basis points to 6.79% from 6.75% at previous close, while the benchmark five-year swap rate was six basis points higher at 7.17% from 7.11% yesterday.

ECONOMIC INDICATORS Economic data/Indicators ACTUAL 2.20% 1.25%

EUR German Consumer Price Index (YoY) (MAY P) CAD Bank of Canada Rate Decision (30 MAY)

EXPECTED

PREVIOUS

1.90% 1.25%

1.60% 1.25%

German consumer price inflation soared more than expected in May to hit the highest level in over a year, data showed on Wednesday, surpassing the European Central Bank's rate target of just under 2 percent for the euro zone as a whole. German consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 2.2 percent year-on-year after an increase of 1.4 percent in the previous month, the Federal Statistics Office said. he Bank of Canada held interest rates steady on Wednesday, as expected, but dropped cautious language about future rate moves in a signal that higher borrowing costs are on the way.While the bank noted uncertainty about trade policy and stresses in emerging market economies, it dropped oft-repeated language pledging a cautious approach to setting monetary policy, suggesting gradual rate hikes will soon resume.

Upcoming Economic Data/Events ACTUAL EUR Euro-Zone Consumer Price Index Core (YoY) (MAY A) CAD Gross Domestic Product (YoY) (MAR)

EXPECTED

PREVIOUS

1.00% 3.00%

0.70% 3.00%

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 5,28,246 6,24,644 27,585 46 27,486 131 12,917 50 12,21,105

Value (in cr) 3,562.64 4,242.97 246.81 0.42 217.21 1.05 78.97 0.32 8,350.39

OI 29,35,178 14,31,957 53,166 812 1,03,361 3,184 31,636 1,135 45,60,429

No. of trades 20,542 16,507 2,543 10 2,697 23 1,214 3 43,539

Volume 4,94,953 25,820 26,372 12,751

Value (in cr) 3,338.82 203.97 235.94 78.15

OI 23,35,895 80,670 47,774 28,004

No. of trades 18,485 2,475 2,381 1,168

[email protected]

91-22-66263510

Contract* USDINR 270618 EURINR 270618 GBPINR 270618 JPYINR 270618

LTP 67.6900 79.0525 90.13 62.35

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

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