Market Briefing

We booked profits on our USDINR short position and stand neutral. The move lower in USDINR came alongside a surge in volume. 

After the long consolidation between 82.60 - 82.90, reckon buyers got trapped and then the sharp move lower along with surge in volume suggests big unwinding of positions / initiation of fresh shorts. Yesterday, intraday volume data shows buying interests between the 82.50 - 82.60 zone.

We are neutral on the pair ahead of the CPI Data.

Market is positioned for a peak in the CPI inflation numbers and the same can be seen in the lower US yields with 2Y back to price resistance at 4.20% yield and 5Y back to price resistance at 3.52% yield. Taking cues from offshore markets, India Gsec yields are also trading lower and OIS is also tad bit lower. 1Y OIS continues to be rangebound b/w 6.55% - 6.75% and 5Y OIS has seen multiple rejections at the 6.50% level with support coming in at 6.20%. We are neutral on forwards and OIS at the current levels.

In another piece of news, according to the World Bank, Indian economy is likely to grow at a robust 6.6% in FY24. The global economy has been projected to grow by 1.7 per cent in 2023, while the Euro Area and the US are expected to grow at zero per cent and 0.5 per cent respectively during the year. China’s growth has been projected to pick up to 4.3 per cent in 2023 as the lifting of pandemic restrictions releases pent-up consumer spending.