Markets Shun Panic, Fed rate hike probability falls to 26% in Sep

[Raam]

VERDICT CORRECTION: Markets Shun Panic, Fed rate hike probability falls to 26% in Sep

QUOTE: Friendship is unnecessary, like philosophy, like art... It has no survival value; rather it is one of those things that give value to survival

MARKET PULSE Fed Atlanta President Lockhart : 1st rate hike in 10 years this year Probability of Fed rate hike in Sept. falls to 26 % from 48% on Aug 18th US Data : House Price Index, PMI - Services & Manufacturing, New Home sales Forecast : Effective fed funds rate will average 0.375 % after the first rise Japanese FM official: " JPY rally to a seven-month high was abrupt" Japan's Aso says China's policies stirring concerns in markets Forecast : 21-one of 37 economists : BoJ will add to its record stimulus, in Oct Today: Germany's final 2Q GDP and IFO business confidence Merkel, Hollande blast German anti-migrant riot as crisis surges Merkel, Hollande seek Ukraine enforcement before Putin talks Finland becomes weakest EU economy set to contract a 4th year Iran's vice president growth in 2016 due to removal of sanctions, to offset oil fall China stocks extend biggest plunge since 2007 on support doubts Forecast : India -July key industries output data expected; +3.05% y/y in June Indian Macroeconomic parameters are sound, FM Jaitley says DBS : RBI's Sept. policy decision will be a "tough call" against volatility DBS: Odds of a rate cut have risen in India after below-consensus July CPI Returns on gold in the past 5 days highest among 22 commodities in BB Index Gold rebounded 7 % from a 5-year low in Jul and capped a 4.1 % weekly rise on Fri EIA Inventories forecast : +2m bbl last wk, after +2.6m bbl through Aug. 14 CBOE Crude Volatility Index closed 50.11 Mon ( Apr 1 high) up 9.1 w/w Structural glut in the oil market is going to remain," :Ayers Alliance China's stock market took its biggest dive in 8t years. T DJIA spent the day far in the red, losing almost 600 points. U.S. crude averaged more than $90 a barrel from 2011 through 2014 WTI price has fallen for 8 straight weeks, the longest slump in 30 years INR MARKETS INR rises 0.4% to 66.4125 after a low of 66.7325 Mon., weakest since Sept. 2013 1-month volatility rose 16 bps to 9.7350%; avg for past 12M is 6.7141% INR 1-month forwards rise 0.4% to 66.92 per USD USD/INR Pivot point at 66.5533 USD/INR support at 66.3741, 66.1033 & 65.6533 USD/INR Resistance at 66.8241, 67.0033 & 67.4533 14-day RSI turning back from overbought territory FACTORS India's rating could be raised if reforms are realized: Moody's. Global investors sold net $349.3m of Indian stocks on Aug. 21 India's leading stock index Sensex fell 5.9% yesterday RBI Deputy Governor Mundra to speak at a banking event RBI's Deputy Governor Khan to speak at the same event Forecast : India -July key industries output data expected; +3.05% y/y in June Indian Macroeconomic parameters are sound, FM Jaitley says DBS : RBI's Sept. policy decision will be a "tough call" against volatility DBS: Odds of a rate cut have risen in India after below-consensus July CPI FOREIGN EXCHANGE MARKETS The JPY fell against the USD for the first time in 5 days USD/JPY +1.34% at 120.00 (range 118.26-120.11) EUR/USD -0.71% at 1.1537 (range 1.1525-1.1623) AUD/USD +0.78% at 0.7212 (range 0.7129-0.7233) USD/CAD -0.26% at 1.3252 (range 1.3246-1.3291) GBP/USD -0.06% at 1.5766 (range 1.5746-1.5779) USD/CHF +0.52% at 0.9351 (range 0.9302-0.9379) U.S. Treasuries fall, with 10-year yield rising 4 bps to 2.043% FACTORS Fed Atlanta President Lockhart : 1st rate hike in 10 years this year Probability of Fed rate hike in Sept. falls to 26 % from 48% on Aug 18th US Data : House Price Index, PMI - Services & Manufacturing, New Home sales Forecast : Effective fed funds rate will average 0.375 % after the first rise Japanese FM official: " JPY rally to a seven-month high was abrupt" Japan's Aso says China's policies stirring concerns in markets Forecast : 21-one of 37 economists : BoJ will add to its record stimulus, in Oct Today: Germany's final 2Q GDP and IFO business confidence Merkel, Hollande blast German anti-migrant riot as crisis surges Merkel, Hollande seek Ukraine enforcement before Putin talks Finland becomes weakest EU economy set to contract a 4th year Iran's vice president growth in 2016 due to removal of sanctions, to offset oil fall China stocks extend biggest plunge since 2007 on support doubts GOLD MARKETS Gold spot gained 0.1 % to $1,156.01 in Asia , after falling 0.5 % on Mon Gold little changed in Asia, nearing Friday's 6-week high Gold futures Dec flat at 1,155.30 after retreating 0.5 % on Mon Silver Spot up 1 % to $14.9123 after plunging 3.6 % on Aug. 24 FACTORS Increased physical demand amid plunge in commodities to a 16- year low Returns on gold in the past 5 days highest among 22 commodities in BB Index Gold rebounded 7 % from a 5-year low in Jul and capped a 4.1 % weekly rise on Fri CRUDE OIL MARKETS Oct. WTI +63c at $38.87/bbl Asia time Volume of all futures 10% above 100-day moving average Oct WTI Contract settled at $38.24 on Monday, lowest close since Feb. 2009 WTI prices dropped to $32.40 intraday in Dec. 2008. Oct. Brent +66c to $43.35/bbl total vol. +65% vs 100-day moving average Brent-WTI spread at $4.49/bbl FACTORS EIA Inventories forecast : +2m bbl last wk, after +2.6m bbl through Aug. 14 CBOE Crude Volatility Index closed 50.11 Mon ( Apr 1 high) up 9.1 w/w That structural glut in the oil market is going to remain," :Ayers Alliance China's stock market took its biggest dive in 8t years. T DJIA spent the day far in the red, losing almost 600 points. U.S. crude averaged more than $90 a barrel from 2011 through 2014. WTI price has fallen for 8 straight weeks, the longest slump in 30 years Biggest losers on S&P 500 in energy : Newfield Exploration Co., 10 % down