US2s10s Bull Flatten // Oil Lower // Asian Equities Mixed

There is no such thing as a good or bad idea regardless of price!

Goodmorning!!

The US equity markets and the USD index were placid. Crude Oil prices moved decisively lower below the $81.60 support to trade a low of $79.13 following less than encouraging China data, API inventories, weak demand outlook by EIA and US2s10s bull flattened. The much awaited Fed Chair Powell's speech focused on the need for greater adaptability in forecasting techniques and refrained from any discussions around Monetary Policy. Today again he will be part of a panel discussion so be tuned to the wires.

US2s +2 bps, 4.94% , High 4.955% - Low 4.91%

US10s - 7.50 bps, 4.495%%, High 4.61% - Low 4.49%

US2s10s -45 bps (- 10 bps)

DXY 105.53 Flat on the day

Fed Fund pricing

Peak Terminal Pricing 5.37%

Jun 24 Pricing 5.06% ~ market is pricing in one full 25 bps rate cut by mid next year

Dec 24 Pricing 4.45%

On the India macro front,

On Nov 7, liquidity deficit widened to INR 21K crore possible on excise duty payments and Overnight WACR was anchored around the upper corridor band at 6.75%

The OIS curve moved lower with 4Y and 5Y OIS down 4.5 bps. The front end rates upto 3months were flat, 6m - 3Y part of the curve was down 1 bps - 2.50 bps. The week ahead will see the release of the India CPI, WPI data and the Trade Deficit number.

MIFORs saw a total volume of INR 350 Crs and traded almost flat on the day.

The forward curve moved lower across the curve. C/T points traded a low of zero and WAR was seen at 0.10 ps (0.44%). T/S points traded a low of 0.04 ps (0.40%) and a WAR of 0.09 ps. C/S points traded at 0.28%. USD cash demand weighed on the forward curve. Nov 24 to Jul 24 contracts moved 5 - 8 bps lower and Sep - Oct 24 contract moved 2 - 3 bps lower. Oct contract closed at 1.59%.

That's the wrap for today. Happy Trading.

Comments

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