MORNING MARKET UPDATE

MORNING MARKET UPDATE 20 Mar 2018 11:14

CURRENCY UPDATE

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

65.2225 1.2339 1.4031 80.4840 91.5210 0.7705 106.31 0.9522 1.3079

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

6.00 36.50 62.25 82.75 104.75 126.00 145.25 167.50 187.50 207.50 227.00 245.00

Market Commentary RUPEE -The Indian rupee fell to over two-week low of 65.22/65.23, against 65.1675/65.1775 to a dollar at its previous close, on caution ahead of the Federal Reserve’s two-day monetary policy meet that starts today.

MAJOR CURRENCIES- The euro on Tuesday held on to gains made the previous day, when it rose on revived bets for the European Central Bank to wind down its bond-buying stimulus this year and to raise interest rates around the middle of 2019. The euro, which advanced 0.4 percent on Monday, held steady on the day at $1.2336. The dollar rose 0.2 percent to 106.32 yen, inching away from a 16-month low of 105.24 yen set in early March.Sterling held steady at $1.4024 . On Monday, the pound rose as high as $1.4088, its strongest level since Feb. 16. OTHERS - The Australian dollar hovered near three-month lows on Tuesday, undermined by acute risk aversion ahead of a much-anticipated U.S. Federal Reserve policy meeting.The Australian dollar was also hit by weaker prices for iron ore, the country's top export earner, as fears of a global trade war swirled through commodity markets.The Aussie was last down 0.1 percent at $0.7707 and within spitting distance of Monday's $0.7687, which was the lowest since late December. The New Zealand dollar edged down 0.2 percent to $0.7226 from Monday's trough of $0.7197, a level not seen since early March.

Technical Strategy EUR/USD - EUR/USD is currently trading at 1.2337. The pair is currently trading above the support level of 1.2332. The RSI is suggesting steady movementc for the pair. For the day, the pair is expected to take support at 1.2332 and the resistance at 1.2375 level. USD/INR - USD/INR is currently trading at 65.23. The pair is currently trading below the resistance level of 65.3182. The RSI is suggesting steady movment for the pair. For the day the pair may take support at 65.1065 and take resistance at 65.3182 level.

LIBOR 1M 2M 3M 6M 1Y

USD 1.8407 1.9468 2.2225 2.3905 2.6333

EURO -0.4109 -0.3971 -0.3893 -0.3310 -0.2537

JPY -0.0768 -0.0655 -0.0557 0.0147 0.1072

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

2.3980 2.5940 2.7808 2.9030

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

6.475 6.945 7.04

OIS 6.4675 6.49 6.81 6.90 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

33032.23 10128.45 24610.91 7344.24 7042.93 5222.84 12217.02 31393.14 21760.04

0.33 0.34 -1.35 -1.88 -1.72 -1.15 -1.41 -0.38 -0.08

Crude/Bullion (In $)

Crude Oil(WTI)

Gold Silver

62.38 1316.08 16.323

FII/MF Cash

(In cr `) 483.79 1,750.51 6,607.80 94,069.70 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 15315.00 6.18 6.652 7.366 7.604

INBMK 4Y 7Y 10Y

STOCKS(Asia) Asian shares fell on Tuesday after investors took profits in high-flying U.S. technology shares on fears of stiffer regulation as Facebook came under fire following reports it allowed improper access to user data. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.4 percent. Japan's Nikkei fell 1.0 percent.

OIL Oil prices edged up on Tuesday, lifted by tensions in the Middle East, although rising output in the United States and shaky stock markets put a lid on further gains.U.S. West Texas Intermediate (WTI) crude futures were at $62.31 a barrel at 0128 GMT, up 25 cents, or 0.4 percent, from their previous close. Brent crude futures were at $66.26 per barrel, up 21 cents, or 0.3 percent. GOLD Gold was firm on Tuesday, having recovered from over a two-week low hit in the previous session, as traders waited to gauge the path of U.S. monetary policy for the rest of the year from the two-day Federal Reserve meeting that kicks off later in the day. Spot gold was flat at $1,316.44 per ounce at 0353 GMT. In the previous session, it touched $1,307.51 an ounce, its lowest since March 1. U.S. gold futures for April delivery dropped 0.1 percent to $1,316.10 per ounce. BONDS (U.S.) U.S. Treasury prices gained on Monday as stocks tumbled and as investors waited on the conclusion of the Federal Reserve’s two-day meeting on Wednesday, where the U.S. central bank is widely expected to raise rates for the first time this year. A jump in consumer prices in January increased expectations that inflation was rising, which was seen as increasing the likelihood of four rate hikes this year, though February’s consumer price index last week showed prices cooled in the month. Benchmark 10-year notes gained 1/32 in price on the day to yield 2.846 percent, after earlier rising as high as 2.879 percent. U.S. bond yields had risen earlier on Monday in line with higher European bond yields after the European Union and Britain reached a deal on a

Indian Money Market 7.326 7.642 7.606

US Treasury 3Y 5Y 7Y 10Y

STOCKS(US & Europe) U.S. stocks dropped on Monday, with the S&P and Nasdaq suffering their worst day in just over five weeks, as concerns over increased regulation for large tech companies was spearheaded by a plunge in Facebook shares.The stock had its worst day since March 2014 and was down 10.8 percent from its closing record hit on Feb. 1, to put the stock squarely in correction territory, a drop of 10 percent from its high. The Dow Jones Industrial Average fell 335.6 points, or 1.35 percent, to close at 24,610.91, the S&P 500 lost 39.09 points, or 1.42 percent, to 2,712.92 and the Nasdaq Composite dropped 137.74 points, or 1.84 percent, to 7,344.24.

2.4623 2.6587 2.7947 2.8647

CALL- India's one-day cash was at 6.00%/6.05%, from 5.80%/5.85% at the previous close. BONDS- The benchmark 10-year bond was at 96.93 rupees, yielding 7.62%, against 97.00 rupees and a 7.61% yield at the previous close, ahead of the Fed’s monetary policy meeting; wherein the U.S. central bank is widely expected to hike rates. IRS- The one-year and the benchmark five-year swap rates were up one basis point each at 6.46% and 6.81% against 6.45% and 6.80% at the previous close.

ECONOMIC INDICATORS Economic data/Indicators EUR Euro-Zone Construction Output w.d.a. (YoY) (JAN) AUD House Price Index (YoY) (4Q)

ACTUAL 3.70% 5.00%

EXPECTED

PREVIOUS

3.90%

1.40% 8.30%

A measure of construction output and activity in the Euro Zone. Increased construction suggests a growing economy as expensive construction outlays reflect consumer and business optimism. The index is commonly used as a business cycle indicator, as the housing market is closely tied to changes in economic growth. There are two headline figures. The current month's figure adjusted for economic fluctuations that occur throughout the year. And the annualized figured including the full year's data.

Upcoming Economic Data/Events ACTUAL GBP Consumer Price Index (YoY) (FEB) GBP Core Consumer Price Index (YoY) (FEB) GBP House Price Index (YoY) (JAN)

EXPECTED

PREVIOUS

2.80% 2.50% 5.00%

3.00% 2.70% 5.20%

Currency Futures & Options Instrument* Futures Options Futures Options Futures Options Futures Options Chandan Mishra

Underlying USDINR USDINR GBPINR GBPINR EURINR EURINR JPYINR JPYINR Total

Volume 2,95,495 4,81,415 25,305 86 30,838 2,598 4,600 529 8,40,866

Value (in cr) 1,920.35 3,141.39 231.92 0.78 248.98 20.90 28.15 3.20 5,595.67

OI 30,22,383 23,85,223 1,03,565 1,460 1,74,085 17,224 49,060 8,448 57,61,448

No. of trades 10,244 10,326 2,332 16 2,871 151 807 2 26,749

Volume 2,50,765 20,938 17,867 3,955

Value (in cr) 1,636.96 168.73 163.61 24.29

OI 21,12,112 90,000 54,790 32,230

No. of trades 7,778 1,973 1,699 716

[email protected]

91-22-66263525

Contract* USDINR 260318 EURINR 260318 GBPINR 260318 JPYINR 260318

LTP 65.2975 80.5600 91.56 61.44

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.