May 24 2018

Rupee edges higher as Fed meeting minutes hurt US yields

Financial Market Overview

24th May, 2018

Morning Coffee:-                                                                                  

MARKETS AT OPEN:-

Rupee:-

  • Indian rupee opens higher against the dollar at 68.30, drawing support from the fall in 10-year Treasury yield to below 3% after the Federal Reserve’s May meeting minutes. Pair USDINR now at 68.31 against 68.42 previous close.
  • Pair to tip in range between 68.20-68.50.

Indian Equities:-

  • Benchmark indices opened the trade on a positive note indicated by SGX Nifty futures, partly led by short covering as the market lost around a percent in previous session.
  • The 30-share BSE Sensex gained 93.16 points at 34,438.07 and the 50-share NSE Nifty rose 32.60 points to 10,463.

Global Markets:-

  • Asian markets are mixed today. The Hong Kong’s Hang Seng gains 0.16%  while the Australian ASX200 is trading down by 0.19% and the Shanghai Composite is fell by 0.03%.
  • European markets finished sharply lower yesterday with shares in Germany leading the region. The DAX is down 1.47% while France’s CAC 40 is off 1.32% and London’s FTSE 100 is lower by 1.13%.
  • US. stocks ended with small gains on Wednesday after minutes from the Federal Reserve’s latest meeting suggested higher inflation may not result in faster interest rate hikes. The Dow Jones Industrial Average rose 52.4 points, or 0.21 percent, to 24,886.81, the S&P 500 gained 8.85 points, or 0.32 percent, to 2,733.29 and the Nasdaq Composite added 47.50 points, or 0.64 percent, to 7,425.96.
  • Long-term U.S. bond yields fell by the most in two months after the Fed May minutes indicated that the monetary authority was willing to allow inflation to overshoot its 2% target. Policymakers noted that a temporary period of inflation modestly above 2 % would be consistent with their “symmetric” inflation objective, signaling that it was unlikely they would accelerate the pace of future rate hikes. The minutes suggested that the central bank remained on course for a rate increase this month, an outcome well discounted by the markets.
  • Concerns over the U.S.-China trade matters were back after President Donald Trump called for new tariffs on imported cars and trucks. The Trump administration on Wednesday launched a national security investigation into car and truck imports that could lead to new U.S. tariffs similar to those imposed on imported steel and aluminum in March.