INR: Flat Start, GDP Due Tomorrow
Aug-30 03:38
The Rupee has opened dealing little changed from Tuesday's closing levels.
- USD/INR prints at 82.68/70, ranges in the pair remain narrow and moves have had little follow through in recent dealing. We sit on the 20-Day EMA (82.6844) and well within the August range.
- Bears look to target the 200-Day EMA (81.8555). Bulls target the high from 20 October 2022 (83.2975).
- India has cut cooking gas prices to soften the impact of rising inflation on household expenses as the nation heads into seasonal festivals and key elections. More here.
- Q2 GDP is due tomorrow, an uptick to 7.8% Y/Y from 6.1% is expected. Also on the wires tomorrow is the July Fiscal Deficit and Eight Infrastructure Industries Index.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
JGBS: Futures Sitting Weaker, Off Session Lows, As BoJ Buys Y300bn 5-10Y At Market
Jul-31 03:20
At the Tokyo lunch break, JGB futures are weaker, just off session lows, -53 compared to the settlement levels.
- There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined retail sales beat and industrial production miss.
- According to Bloomberg (Cranfield), JGB traders are entering a new phase in which BoJ bond-buying programs are more likely to be an avenue for increasing, rather than reducing risk. Bond investors now have a moving target where they can expect the BoJ to step in when there has been too much short-term bond volatility and purchase JGBs to smooth the market. At least until the 1% threshold is reached.
- The cash JGB curve has bear steepened with yields 0.6bp (1-year) to 7.2bp (20-year) higher at the Tokyo lunch break as the market continues to adjust to Friday’s surprise decision to tweak YCC. The benchmark 10-year yield is 3.0bp higher at 0.598%. The Bank will offer to purchase 10y JGBs at 1.0%, instead of 0.50%, every business day through JGB purchase programs and fixed-rate operations, in accordance with the level and speed of change. Today the BoJ announced bond-purchase operations of ¥300b of 5-to-10-year notes at market.
- The swap curve also bear steepens with swap spreads generally wider apart from the 7-year and 20-year zones.
JAPAN DATA: Japan Jun Ind. Output +2.0% M/M; First Rise in 2 Mths
Jul-31 03:13
- Japan's industrial production increased 2.0% m/m in June, marking the first rise in two months. The increase, led by automobile industry, is driven by solid sales in both domestic and overseas markets..
- Shipments rose for the first time in three month by 1.5% m/m, offsetting last 0.6% m/m fall.
- Inventory declined 0.1% m/m in June, first decline in two months, comparing with the 1.5% m/m increase in May, led by automobile industry.
- METI maintains its assessment of production as "gradual recovery" on future increasing production plans.
- METI sees production will fall 0.2% (revised up from -0.6%) in July before rising 1.1% in August.
AUD: A$ Stronger On Better Equity Sentiment
Jul-31 02:55
AUDUSD jumped on better-than-expected China manufacturing PMI data but then reacted to the weaker services read but overall it is up 0.4% to around 0.6678, close to the intraday high of 0.6680. The USD index is up 0.1%.
- AUDJPY is 0.8% higher to 94.59 as the yen has weakened following the first BoJ bond purchase after Friday’s YCC adjustment.
- AUDNZD is up slightly to around 1.0808. Aussie is up 0.5% versus the euro to 0.6062 and +0.4% against the pound to 0.6059 and 0.5195.
- Equity markets are generally higher with the Hang Seng up 1.5% and the CSI 300 +0.7% but the ASX is flat. S&P e-minis are down 0.1%. Brent is 0.3% lower at $84.15/bbl. Copper is up 0.2% and iron ore is rising towards $109/t.
- The Fed’s Goolsbee speaks later and the senior loan officer survey is published. The July MNI Chicago PMI and Dallas Fed surveys print. Euro area Q2 GDP & July inflation are also released. The focus of Australia’s week will be Tuesday’s RBA meeting, where economists are split but expect another hike at the margin.
