Halister News

(Bloomberg) -- Indian rupee’s recent gains against the USD has provided the RBI some room to cut rates and address slowing inflation without risking currency weakness that may trigger capital outflows, Bloomberg strategist David Finnerty writes.

• Rupee has strengthened 1.1% to 67.1950 per dollar from 67.9475 at close of trading on Jan. 30; this has been aided by foreign net buying of local bonds and equities so far this month
  • An RBI rate cut may spur further rupee strength if investors see it as a positive measure to support economic growth
• USD/INR has started a potential series of bearish trading gaps with the formation of breakout and continuation gaps; see chart
  • These formations signal the pair may push lower near- term as bearish momentum grows
• USD/INR is currently -0.2% at 67.1850, breaching below 200- DMA support for first time since November
  • A close below 200-DMA may see FX pair try for 66.6250, Nov. 10 close, to fill in yet another trading gap created on Nov. 11 when the pair gapped up at open
  • MACD has bearishly fallen below zero and signal line indicating momentum is to downside
• RBI is expected to cut both reverse repo rate and repurchase rate by 25bps to 5.50% and 6.00% respectively, according to 7 of 9 economists in Bloomberg survey; two forecast rates to remain unchanged
  • Decision due Feb. 8 at 2:30pm local time
• India CPI fell for fifth consecutive month in December to 3.41% y/y, lowest reading since November 2014
• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.

• To get this story sent to your inbox real-time, run NI INRATINGS , click on Display & Edit, then Set Alert Delivery

UPGRADE

• Durga Projects
  • Term loan raised to BB+ from BB at ICRA
  • Cites healthy bookings and customer advances with satisfactory construction progress in its ongoing residential project

Economic Release Details: {IDGDPY Index ECOD} --YUDITH HO

(Bloomberg) -- AUD/USD’s momentum over past month means risks of upside breakout toward Nov. 8 high 0.7778, unless RBA is orceful in reiteraing otherwise redundant easing bias amid improving data pulse, writes Bloomberg strategist Michael G. Wilson.

• RBA will keep cash rate at 1.50% on Tuesday, according to all but one of 27 economists in Bloomberg survey; announcement due 2:30pm Sydney
• AUD/USD best performer across G-10 this year (up more than 6%) even as OIS curve price down odds of RBA hikes this year to less than 50%, see chart
  • AUD/USD relative strength indicator at 69 confirms strong conviction remains in current move; slow stochastic, though elevated at 81, has retraced from month’s highs
  • Breach of resistance at Oct. 20 high of 0.7734 could open up move toward 0.7778, which was strongest level since April; support seen at 0.7609, Jan. 24 high
• RBA may wait until Friday’s quarterly Statement on Monetary Policy to offer detailed views, at which they may defer again on changes to bias until receipt of 4Q GDP
• Divergence from rate differentials to the U.S., expected or otherwise, has failed to materialize in A$ pressure
  • Absence of wage growth in Friday’s non-farm payrolls saw Fed rate hike pricing finish lower on the week
• Domestically, OIS pricing of potential RBA movements, having regard to weaker-than-expected 3Q16 GDP print, not reflected in recent A$ price action
• UBS wrote in note Monday that “on balance, however, the push from commodities should offset any pull from monetary policy going forward”
• Monday’s retail sales miss sent AUD/USD down 0.2% to 0.7667, with OIS now pricing less than 20% chance of a rate hike by Dec.

NOTE: Michael Wilson is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.

(Bloomberg) -- Australia is scheduled to release December retail sales data at 11.30am local time. ANZ job ads for January are also due.

• December retail sales m/m est. 0.3% vs prev. 0.2%
• 4Q retail sales ex-inflation q/q est. 0.9% vs prev. -0.1%
• January ANZ job advertisements m/m est. n/a, prev. -1.9%

(Bloomberg) -- Chinese prosecutors will target securities and futures market manipulation, insider trading and false disclosure, according to a Sunday report by Xinhua News Agency posted on the top government attorney’s office website.

• China will strictly punish illegal personal deposit holding, illegal fund raising, money laundering and underground banking
• NOTE: China Gives ‘Hedge Fund Brother No.1’ 5 1/2 Years in Prison Link
• Link to report: http://tinyurl.com/zray62n