INDIA: RBI to Discuss Further Liquidity Steps Ahead of April MPC Meeting
Mar-27 11:04
- The RBI is set to meet lenders next week (Apr 3) to discuss changes in its liquidity management framework so that borrowing costs are better anchored to the policy rate, Bloomberg reported citing people familiar with the developments. The central bank is said to be considering moving to different maturities in its repo operations, including shorter tenors, to ensure that borrowing costs are more closely aligned to policy rate. Under the current liquidity model, the central bank’s main tool is a 14-day cash window.
- Efforts to address liquidity issues, and particularly the mismatch between onshore/offshore markets, accelerated following the spike higher in offshore borrowing rates – a likely consequence of the RBI’s more activist approach to currency management which was particularly evident in mid-February.
- While the RBI have been more attentive to such issues (with one such measure to address its concerns including a $10bln USD/INR buy/sell swap auction), USD/INR 1-month forward premiums spiked significantly earlier this month to reach its highest since 2022.
- The RBI meet next on April 9, where the February inflation figures should have cleared the way for another rate cut after last month’s easing step highlighted the RBI’s shift in policy focus towards reviving growth.
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OUTLOOK: Price Signal Summary - Resistance In EURUSD Remains Intact
Feb-25 11:03
- In FX, a bull cycle in EURUSD remains intact and the pair is trading closer to its recent highs. Sights are on resistance at 1.0533, the Jan 27 high and a reversal trigger. Clearance of this level would strengthen a bullish condition and pave the way for a climb towards 1.0630, the Dec 6 high. For bears, initial firm support to watch lies at 1.0401, the Feb 19 low. A move through this support would signal a potential reversal threat.
- A bull cycle in GBPUSD remains in play and the pair is holding on to the bulk of its recent gains. Fresh short-term gains confirm a resumption of the uptrend and maintain the current sequence of higher highs and higher lows. An extension would strengthen the bullish condition and open 1.2767, the 50.0% retracement of the Sep 26 ‘24 - Jan 13 bear leg. Initial firm support to watch is 1.2522, the 50-day EMA.
- USDJPY bears remain in the driver’s seat and the pair is trading just above its latest lows. Recent weakness has exposed the next key support at 148.65, the Dec 3 ‘24 low. A break of this level would strengthen a bearish condition and pave the way for an extension towards 146.95, the 61.8% retracement of the Sep 16 ‘24 - Jan 10 bull leg. On the upside, initial firm resistance to watch is 152.34, the 20-day EMA.
US: SOFR FIX - 25/02/25
Feb-25 11:02
SOFR FIX - Source BBG/CME
- 1M 4.32352 -0.00007
- 3M 4.31852 0.00048
- 6M 4.27042 -0.00474
- 12M 4.17208 -0.01978
MNI: UK CBI FEB DIST TRADE REPORTED SALES -23
Feb-25 11:00
- MNI: UK CBI FEB DIST TRADE REPORTED SALES -23
- UK CBI FEB DIST TRADE EXPECTED SALES -30
