UNEASY LULL: Fed's indicates delay in hike, EU seals Greece deal, All eyes on China
QUOTE: You manage things; you lead people
MARKET PULSE

  • FOMC : Didn't consider conditions for a rate hike (1st in9 years) conducive
  • FOMC : Fed's 2.0% inflation target was still far (headline CPI rose 0.1% m/m July)
  • Funds added USD longs for an 8th week, the longest stretch since 2010.
  • USD Spot Index, fell as much as 0.1 % and was flat today at 1,208.42
  • US Rate Hike Probability : 38 % hike on Sept. 16-17 meeting vs 54% on Aug 7th
  • Funds increased net long USD positions to 437,635 contracts in the week ended Aug. 11
  • EU FMs signed off on bailout program for Greece of as much as 86b euros ($95b)
  • Time is running out for Ukraine to cut deal with holders of its $19b debt
  • The physical demand in Gold has risen , delivery premiums at a 6 months high
  • Indian Billionaires Ambani, Birla win non-lending bank permits
  • Credit Agricole: INR should continue to depreciate against USD in coming weeks
  • Credit Agricole : India July CPI and WPI inflation data makes it likely for a rate cut Sep.


INR
MARKETS

  • INR rises 0.1% to 65.2075 per USD
  • 1-month implied volatility rises 1 bp at 7.7225%; avg. for past 12M. is 6.6882%
  • INR 1-month forwards gain 0.1% to 65.54 per USD
  • USD/INR Pivot point at 65.2646
  • USD/INR support at 65.1217, 64.9696, and 64.6746
  • USD/INR resistance at 65.4167, 65.5596 and 65.8546
  • USD/INR MACD above signal line, both rising

FACTORS

  • Indian Billionaires Ambani, Birla win non-lending bank permits
  • Global investors added net $3m of Indian stocks in two days to Aug. 18
  • India's leading stock index Sensex gained 0.4% yesterday
  • RBI Governor Rajan at conference in Mumbai at 9:15am
  • Credit Agricole: INR should continue to depreciate against USD in coming weeks
  • Credit Agricole : India July CPI and WPI inflation data makes it likely for a rate cut Sep.


FOREIGN EXCHANGE
MARKETS

  • The USD fell against the EUR for a second day
  • USD/JPY +0.11% at 123.93 (range 123.79-123.99)
  • EUR/USD +0.13% at 1.1134 (range 1.1115-1.1149)
  • AUD/USD +0.05% at 0.7352 (range 0.7342-0.7373)
  • USD/CAD -0.11% at 1.3114 (range 1.3100-1.3129)
  • GBP/USD +0.01% at 1.5682 (range 1.5676-1.5702)
  • USD/CHF +0.04% at 0.9660 (range 0.9639-0.9663)

FACTORS

  • FOMC : Didn't consider conditions for a rate hike (1st in9 years) conducive
  • FOMC : Fed's 2.0% inflation target was still far (headline CPI rose 0.1% m/m July)
  • Funds added USD longs for an 8th week, the longest stretch since 2010.
  • USD Spot Index, fell as much as 0.1 % and was flat today at 1,208.42
  • US Rate Hike Probability : 38 % hike on Sept. 16-17 meeting vs 54% on Aug 7th
  • Funds increased net long USD positions to 437,635 contracts in the week ended Aug. 11
  • EU FMs signed off on bailout program for Greece of as much as 86b euros ($95b)
  • Time is running out for Ukraine to cut deal with holders of its $19b debt


GOLD
MARKETS

  • Gold spot rose 0.5 % to $1,139.59 (July 17 High) and traded at $1,138.26 in Asia
  • Gold rose 1.5 % on Wednesday
  • Gold futures Dec. up 1 % to $1,138.90 (July 17 High) , extending Wednesday's 1 % gain
  • China: Gold 1.4 % to 234.93 CNY/ gram on SGE, up for a 4th day
  • Silver spot added 0.4 % to $15.3857 after surging 3 % on Wed.

FACTORS

  • Bets eased on a U.S. interest rate increase in Sep -38% now vs. 54% on Aug 7th
  • Fed officials said they want more indication on the labor market and higher inflation
  • The physical demand in Gold has risen , delivery premiums at a 6 months high