FX Market Insight
USD/INR Spot reference {78.0450}:
Yesterday, USD/INR had a gap up opening at 78.1200 tracking sharp negative sentiment in all asset classes against the Friday’s close of 77.8325. After opening the pair immediately started going up and made an all-time high of 78.2800. We heard RBI presence near all-time high and later some corporate dollar inflows, exporters covering also helped the pair for down move near opening level. After fixing, in the afternoon session the pair was trading between 78.10-14 range most of the time and finally settled near day’s low at 78.0350.
USD/INR Price Action and Technical:
Short-term support at 78.00 has a chance to hold for a recovery towards 77.2800 again, but staying below 78.00 would be taken as a sign of weakness that could bring the price down towards 77.8050.Below this point the chart is more likely to turn more bearish. It needs to rise above 78.3150 to tone down the bearishness to some extent. Unexpected rise above 78.3150 could increase the chances for extending the rise to 78.4975 levels.
Range for the day: 77.8050 to 78.28
Other Currencies
This week is loaded with central bank meetings. On coming Wednesday FED officials are almost certain to raise interest rates by 50 basis points as inflation remains scorching hot, so markets will be driven mostly by their future projections. US CPI reading for May at 8.6% came above expectation, its highest level since December 1981. Could the FED surprise the financial markets and hike by 75 basis points?
The UK central bank also expected to hike by another 25 basis points to 1.25% on Thursday.
The Bank of Japan announces its monetary policy decision on Friday, after the FOMC announcement. Despite the huge fall in the yen in the past week, it would be an enormous surprise if BOJ tinkered with monetary policy. Given the weight of long USD/JPY positioning out there, a tightening move by the BOJ, no matter how tenuous, could see USD/JPY correct strongly.
PBOC continues to draw a line on further Yuan weakness, having started announcing stronger fixes as USD/CNY moved near to 6.8000.Equity Insights
Equity Insights
Indian Equity
The market is expected to open in the red as trends in the SGX Nifty indicate a negative opening for the broader index in India with a loss of 103 points.
The BSE Sensex plummeted 1,457 points or 2.68 percent to 52,847, while the Nifty50 fell 427 points or 2.64 percent to 15,774 and formed a bearish candle on the daily charts.
As per the pivot charts, the key support level for the Nifty is placed at 15,677, followed by 15,579. If the index moves up, the key resistance levels to watch out for are 15,879 and 15,984.
Other Equity
Shares in Asia-Pacific fell in Tuesday morning trade after the S&P 500 fell overnight and closed in bear market territory.
The Nikkei 225 in Japan fell more than 2% while the Topix index declined 1.64%. In Hong Kong, the Hang Seng index slipped 1.3% in early trading. Mainland Chinese stocks also declined as the Shanghai Composite fell 0.87% and the Shenzhen Component fell 1.41%. South Korea’s Kospi dipped 1.59%.
Australia’s S&P/ASX 200, which returned to trade Tuesday following a holiday yesterday, tumbled nearly 5% — one of the worst performers in the region. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.8% lower.
The S&P 500 fell nearly 4% overnight to 3,749.63, closing in bear market territory, or down more than 20% from its January peak.
Other major indexes stateside also saw big declines. The Dow Jones Industrial Average dropped 876.05 points, or 2.79%, to 30,516.74. The tech-heavy Nasdaq Composite lagged, plunging 4.68% to around 10,809.23.
Commodity Insights
OIL
Oil prices seesawed in positive and negative territory on Tuesday, holding up despite recession fears and potential new COVID-19 curbs in China that could dampen demand as the market remains tightly supplied.
US West Texas Intermediate (WTI) crude eased 4 cents to $120.89 a barrel , while Brent crude futures dipped 6 cents to $122.21 a barrel.
Major Economic Events
Economic Calendar | ||||
Tuesday, Jun 14, 2022 | ||||
Time | Country | Event | Forecast | Previous |
11:30 | EUR | German CPI (MoM) (May) | 0.00% | 0.80% |
11:30 | GBP | Claimant Count Change (May) | -49.4K | -56.9K |
11:30 | GBP | Average Earnings Index +Bonus (Apr) | 7.60% | 7.00% |
12:00 | INR | WPI Inflation (YoY) (May) | 15.10% | 15.08% |
14:30 | EUR | Industrial Production (MoM) (Apr) | -2.00% | -1.80% |
14:30 | EUR | German ZEW Economic Sentiment (Jun) | -27.5 | -34.3 |
18:00 | USD | PPI (MoM) (May) | 0.80% | 0.50% |
Disclaimer: All information in this report is collected from various sites on the internet. Although we have taken all precautions for the correct representation of data however we do not take any responsibility for any errors and omissions. The technical analysis and views expressed are the author’s own views. We are not responsible for any losses on account of following the same.
Sources
We have been sharing Daily Morning Reports to help Exporters & Importers to take informed decisions. Please click on the link below to subscribe to our daily morning report.
