MORNING MARKET UPDATE

MORNING MARKET UPDATE 08 Jan 2018 10:46

CURRENCY UPDATE

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

63.3350 1.2028 1.3564 76.1820 85.9110 0.7843 113.23 0.9757 1.2401

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

15.25 36.75 58.50 86.50 112.25 134.00 157.25 179.75 200.50 224.75 246.75 269.50

Market Commentary RUPEE - The Indian rupee is trading at around 63.31 a dollar, versus its previous close of 63.36. Expected range for the day is 63.15 to 63.45 level. MAJOR CURRENCIES- The dollar held steady above a recent 3-1/2 month low against a basket of major peers on Monday, after data showing slower U.S. jobs growth did little to dent expectations for further Federal Reserve interest rate increases this year. The dollar's index against a basket of six major currencies last stood at 91.919 , just above lows of 91.751 set on Jan. 2.U.S. nonfarm payrolls increased by 148,000 jobs last month, after a surge of 252,000 in November, data released on Friday showed. Against the yen, the dollar firmed 0.1 percent to 113.12 yen , having traded in a range of roughly 112.00 yen to 113.75 yen over the past month.The euro edged up 0.1 percent to $1.204. Having started the year on a firm footing, the common currency rose to $1.2089 on Thursday. The yuan was quoted at 6.4873 per U.S. dollar, 0.02 percent firmer than the previous close of 6.4887. OTHERS - The Australian and New Zealand dollars held firm on Monday as optimism about the global economy underpinned commodity prices and riskier assets, encouraging bulls to steadily wear away at chart resistance.The Australian dollar was steady at $0.7861 and just off a three-month high of $0.7875.The New Zealand dollar has also benefited from recent gains in dairy prices, as well as the appetite for risk trades in general.

Technical Strategy EUR/USD - EUR/USD is currently trading at 1.2027 The pair is currently trading above the support level of 1.1975. The RSI is suggesting steady movementc for the pair. For the day, the pair is expected to take support at 1.1975 and the resistance at 1.2075 level. USD/INR - USD/INR is currently trading at 63.31 The pair is currently trading below the resistance level of 63.45. The RSI is suggesting downward movement for the pair. For the day the pair may take support at 63.15 and take resistance at 63.45 level.

LIBOR 1M 2M 3M 6M 1Y

USD 1.5525 1.6219 1.7039 1.8651 2.1495

EURO -0.4076 -0.3919 -0.3814 -0.3243 -0.2503

JPY -0.0295 -0.0267 -0.0270 0.0213 0.1153

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

1.9520 2.1393 2.3193 2.4600

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

6.285 6.735 6.81

OIS 6.42 6.42 6.69 6.78 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

34356.75 10617.05 25295.87 7136.56 7724.22 5470.75 13319.64 30790.03 23714.53

0.59 0.55 0.88 0.82 0.37 1.04 1.44 -0.08 0.88

Crude/Bullion (In $)

Crude Oil(WTI)

Gold Silver

61.61 1320.68 17.23

FII/MF Cash (In cr `) -74.92 3,070.36 -15.58 5,08,528.06 0

FII Cash Flow MF Cash Flow FII CY 2018 MF CY 2017

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

5.95 6.00 -5287.00 6.30 6.598 7.16 7.30

INBMK 4Y 7Y 10Y

STOCKS(Asia) The benchmark BSE Sensex and the broader NSE index were trading 0.53% and 0.52% higher, respectively, tracking gains in most regional shares. Gains were led by index giants HDFC and Infosys. Domestic investors now await the corporate earnings season starting this week. Asian shares crept toward alltime peaks on Monday after Wall Street boasted its best start to a year in over a decade, with brisk economic growth and benign inflation proving a potent cocktail for risk appetite. Japan's Nikkei share average extended the previous session's gains on Friday, probing 26-year highs as banking and brokerage firms rose, while Toshiba stocks strengthened on news of a buyer for its Westinghouse Electric unit.The Nikkei was up 0.9 percent at 23,714.53, touching levels unseen since January 1992. The Shanghai Composite index was up 11.71 points or 0.35 percent at 3,403.46. OIL Oil prices firmed on Monday on the back of a slight decline in the number of U.S. rigs drilling for new production, with crude holding just below near threeyear highs reached last week. U.S. West Texas Intermediate (WTI) crude futures were at $61.62 a barrel, 18 cents, or 0.3 percent, above their last settlement, and not far off the $62.21 May 2015 high reached last week. Brent crude futures were at $67.77 a barrel, 15 cents, or 0.2 percent, above their last close. The U.S. oil price is now into a range that is anticipated to attract increased shale oil production. Rising U.S. production is the main factor countering production cuts led by the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) and by Russia, which began in January last year and are set to last through 2018. GOLD Gold prices held firm on Monday, below a 3-1/2-month peak hit last week, amid expectations of further U.S. interest rate hikes to come this year.Spot gold was mostly unchanged at $1,322.50 an ounce. Last week, the metal touched its highest since Sept. 15 at $1,325.86. U.S. gold futures were also mostly unchanged on Monday at $1,321.50. Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. Among other precious metals, spot silver inched 0.1 percent lower to $17.20 an ounce, after having hit a 1-1/2-month high on Friday at $17.29. BONDS (U.S.) U.S. Treasury yields rose on Friday with the two-year yield hovering near a more than nine-year peak as investors stuck to the view of a possible rate increase

Indian Money Market 7.168 7.29 7.294

US Treasury 3Y 5Y 7Y 10Y

STOCKS(US & Europe) The S&P 500 and Nasdaq notched their best weekly gains in more than a year on Friday as technology stocks helped lift major indexes to records.The Dow Jones Industrial Average rose 220.74 points, or 0.88 percent, to 25,295.87, the S&P 500 gained 19.16 points, or 0.70 percent, to 2,743.15 and the Nasdaq Composite added 58.64 points, or 0.83 percent, to 7,136.56.A U.S. tax overhaul last month that includes hefty corporate tax cuts helped to fuel late-year gains and was the first major legislative victory in President Donald Trump's pro-growth agenda since he took office a year ago.U.S. job growth slowed more than expected in December amid a decline in retail employment, but a pickup in monthly wages pointed to labor market strength. Non-farm payrolls increased by 148,000 jobs last month, the Labor Department said.

2.0596 2.2869 2.404 2.4763

CALL- India's one-day cash rate was last trading at 5.95%/6.00%, against 5.75%/5.80% at the previous close for three-day loans. BONDS - The benchmark 10-year bond was trading at 96.56 rupees, yielding 7.30%, against 96.65 rupees and a 7.29% yield at the previous close, amid profit booking after a rise in early session and on Jan. 5. IRS- The one-year swap rate fell one basis point to 6.41% from 6.42% at the previous close, while the benchmark five-year swap rate was unchanged at 6.68% against its previous close.

ECONOMIC INDICATORS Economic data/Indicators

ACTUAL 0.6% 0.80% 5.4%

GBP Nationwide House PX (MoM) (DEC) USD Construction Spending (MoM) (NOV) AUD Private Sector Credit (YoY) (NOV)

EXPECTED

PREVIOUS

0.1% 0.50% 5.2%

0.1% 0.90% 5.3%

Construction spending gauges the level of construction activity in the United States . The Construction Spending report looks at both residential and nonresidential construction. The construction industry makes a significant contribution to the United States GDP in the form of investment expenditure as well as stimulus of industries related to building. Furthermore, since builders are unlikely to pour money into construction projects unless they feel the economy favors their investment, changes in business sentiment like this are usually quickly seen in construction figures. However, the report has little significance for market participants because of its untimely release. By the time the report is announced other reports, such building permits and building starts have already provided similar information. The report headline is the percentage change from the previous month. Technical notes: The construction industry is a major force to the United States economy, even without including non-construction businesses that are tied to building, such as finance, the furnishing industry, appliance industry and other manufacturing. Private Construction activity can be an effective indicator of business confidence

Upcoming Economic Data/Events ACTUAL EUR German Factory Orders (MoM) (NOV) CHF Consumer Price Index (YoY) (DEC) GBP Halifax House Prices (MoM) (DEC)

EXPECTED

PREVIOUS

0.0% 0.8% 0.20%

0.50% 0.80% 0.50%

Currency Futures & Options

Ashwini Kumar Singh

Instrument* Futures Options Futures Futures Futures Total

Underlying USDINR USDINR GBPINR EURINR JPYINR

Volume 2,96,378 2,67,467 12,612 26,016 9,840 6,12,313

Value (in cr) 1,845.87 1,692.81 108.34 197.81 54.95 3,899.78

OI 20,72,822 24,18,081 67,030 1,24,723 43,113 47,25,769

No. of trades 8,813 6,829 1,140 2,568 836 20,186

Volume 2,75,688 23,961 11,712 9,053

Value (in cr) 1,729.06 182.03 100.60 50.57

OI 15,37,828 1,00,389 56,449 37,997

No. of trades 7,659 2,249 997 742

[email protected]

91-22-66263521

Contract* USDINR 290118 EURINR 290118 GBPINR 290118 JPYINR 290118

LTP 63.4400 76.3975 86.08 56.11

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