LIC Agent in Nagpur
Team MarketConnected Global Updates:
- USDINR has moved from 66.35 to 68 levels in the last 3 days, due to massive USD strength.
- USD has strengthened post Trump winning the elections and his announcements that he would scale up massively on Infrastructure spending.
- On account of this, the Markets expect increase in fiscal deficit of US and in turn increase in borrowings of US as well.
- Borrowings for Spending on developmental expenditure would lead to increase in US Inflation trajectory, since such steps would lead to increased demand for the Goods.
- This has led to growing sentiments that US Interest Rate Hike in December is on cards which can be seen in the yield increase in the 10yr US Bonds (Has moved from 1.7% to 2.2% which is quite huge in a very short span of time).
- This has led to pressure in Emerging economies Currencies and a lot of unwinding of carry trades have been taking place which has affected Indonesian, Malaysian, Indian Currencies massively. In fact Malaysian currency has been so severely hit that its Central Bank had to halt the trading in its currency.
- While Rupee is expected to correct, but it is trading at 68 levels in NDF Markets.
- Due to the demonetisation decision, Equity Markets and Mutual Funds have seen massive liquidation/redemption in the positions due to requirement of cash to face cash/money supply crunch situations in the Markets.
- Consumption of FMCG, Automobile, Consumable Goods shall come massively down in the next few months.
- It is expected that Markets may even correct and breach 8000 levels to even see 7600-7700 levels with more action on certain stocks.
- Banking Stocks should see a good rise due to growing CASA ratios and lowering down of Cost of their funds. Banks shall have flush of liquidity which should lead to fall in deposit and lending rates by the Banks. This is actually indirectly a rate cut in our economy.
- Substantial negative effects shall be seen in already booked flats/properties. However with lower cost of funds for the Banks, and once the money reaches in the hands of prospective buyers, aggressive lending on Home loans front is expected. This is as good as when interest rates fall, people get attracted towards buying of new properties/flats who have not bought yet.
- While we do believe that RBI would come to intervene to stop further depreciation in INR, but with further rise in Dollar Index and pressure on peer Asian currencies (Already DXY is at 101 levels), INR can even see 69 levels though a lot would depend on RBI's stance.
- Such Dollar Strengthening was also seen when Mr Ben Bernanke Ex Fed Chairman had announced tampering in 2013. Massive depreciation in Emerging economies Currencies and massive sell offs were seen then as well.
- Markets are closely looking at how Trump would deliver and act further and there is still a lot of time before which Trump starts taking the shots.
- Due to massive strength in USD, Gold should see 1050 USD levels since all the Underlyings are in quite a good trend.
- In case we do not see major corrections tmrw, we shall be able to see a further continuation of such trends in the following week as well.
#cfpjayantharde #chitkarauniversity #jayanthardemadhuriharde
#lic #mutualfunds
www.jayantharde.com
jayant@jayantharde.com
- USDINR has moved from 66.35 to 68 levels in the last 3 days, due to massive USD strength.
- USD has strengthened post Trump winning the elections and his announcements that he would scale up massively on Infrastructure spending.
- On account of this, the Markets expect increase in fiscal deficit of US and in turn increase in borrowings of US as well.
- Borrowings for Spending on developmental expenditure would lead to increase in US Inflation trajectory, since such steps would lead to increased demand for the Goods.
- This has led to growing sentiments that US Interest Rate Hike in December is on cards which can be seen in the yield increase in the 10yr US Bonds (Has moved from 1.7% to 2.2% which is quite huge in a very short span of time).
- This has led to pressure in Emerging economies Currencies and a lot of unwinding of carry trades have been taking place which has affected Indonesian, Malaysian, Indian Currencies massively. In fact Malaysian currency has been so severely hit that its Central Bank had to halt the trading in its currency.
- While Rupee is expected to correct, but it is trading at 68 levels in NDF Markets.
- Due to the demonetisation decision, Equity Markets and Mutual Funds have seen massive liquidation/redemption in the positions due to requirement of cash to face cash/money supply crunch situations in the Markets.
- Consumption of FMCG, Automobile, Consumable Goods shall come massively down in the next few months.
- It is expected that Markets may even correct and breach 8000 levels to even see 7600-7700 levels with more action on certain stocks.
- Banking Stocks should see a good rise due to growing CASA ratios and lowering down of Cost of their funds. Banks shall have flush of liquidity which should lead to fall in deposit and lending rates by the Banks. This is actually indirectly a rate cut in our economy.
- Substantial negative effects shall be seen in already booked flats/properties. However with lower cost of funds for the Banks, and once the money reaches in the hands of prospective buyers, aggressive lending on Home loans front is expected. This is as good as when interest rates fall, people get attracted towards buying of new properties/flats who have not bought yet.
- While we do believe that RBI would come to intervene to stop further depreciation in INR, but with further rise in Dollar Index and pressure on peer Asian currencies (Already DXY is at 101 levels), INR can even see 69 levels though a lot would depend on RBI's stance.
- Such Dollar Strengthening was also seen when Mr Ben Bernanke Ex Fed Chairman had announced tampering in 2013. Massive depreciation in Emerging economies Currencies and massive sell offs were seen then as well.
- Markets are closely looking at how Trump would deliver and act further and there is still a lot of time before which Trump starts taking the shots.
- Due to massive strength in USD, Gold should see 1050 USD levels since all the Underlyings are in quite a good trend.
- In case we do not see major corrections tmrw, we shall be able to see a further continuation of such trends in the following week as well.
#cfpjayantharde #chitkarauniversity #jayanthardemadhuriharde
#lic #mutualfunds
www.jayantharde.com
jayant@jayantharde.com
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