HIKE STRIKE : Fed, reiterates "Hike" as probability of September rate rise rises
QUOTE: "No person is not your leader if he demands your silence, or denies your right to grow."
MARKET PULSE

  • US Fed at Jackson Hole: Gearing up to hike amidst rocky terrain
  • US Fed's Fischer said he's confident inflation will rise, though undecided on Sep. hike
  • US Fed's Lockhart said time to raise is close
  • USD futures show a 38 % chance the Fed will raise rates in Sep
  • USD futures show a 61% chance the Fed will raise rates in Dec
  • Forecast: US Jobs data - 200,000 jobs in Aug ( 4th straight month of over 200,000)
  • China said to order brokerages to boost support for stock market
  • PBOC deposit rate cut passed on more keenly as bank strains show
  • Goldman Sachs Group Inc. cut its forecast for Chinese growth
  • Japan -Third time unlucky for Abenomics as inflation drops back to zero
  • Today: Euro-zone CPI estimate, Italy CPI
  • India's total external debt rose 6.6% Y/y to $475.8b at end-March 2015
  • FX reserves rise $920.6m to $355.4
  • FII sales of Indian stocks at $2.52 billion in Aug most since Oct 2008


INR
MARKETS

  • INR down 0.2% at 66.1625 per USD a third week of declines;
  • 1 month volatility slips 39 bps to 7.8550%; average for 12M. is 6.7317%
  • INR 1-month forwards drop 0.2% to 66.56 per USD

FACTORS

  • India's total external debt rose 6.6% Y/y to $475.8 b at end-March 2015
  • FX reserves rise $920.6m to $355.4
  • Global investors sold net $474.4m of Indian stocks on Aug 27 (7th selling session)
  • FII sales of Indian stocks at $2.52 billion in Aug most since Oct 2008
  • India's leading stock index Sensex up 0.6% today
  • The INR slid 3.3 % in Aug
  • PM Modi backtracked on a key land acquisition bill on opposition from farmers
  • RBI Guv Rajan- "We're looking at the data and will take a view as the data allows us."
  • RBI Guv Rajan -"We are still in an accommodative mode"


FOREIGN EXCHANGE
MARKETS

  • USD/JPY -0.55% at 121.04 (range 121.01-121.75)
  • EUR/USD +0.55% at 1.1247 (range 1.1161-1.1249)
  • AUD/USD -0.43% at 0.7142 (range 0.7125-0.7179)
  • USD/CAD +0.30% at 1.3239 (range 1.3200-1.3252)
  • GBP/USD +0.23% at 1.5427 (range 1.5378-1.5436)
  • USD/CHF -0.48% at 0.9591 (range 0.9591-0.9647)
  • U.S. Treasuries mixed, with 10-year yield down 2 bps at 2.161%

FACTORS

  • US Fed at Jackson Hole: Gearing up to hike amidst rocky terrain
  • US Fed's Fischer said he's confident inflation will rise, though undecided on Sep. hike
  • US Fed's Lockhart said time to raise is close
  • USD futures show a 38 % chance the Fed will raise rates in Sep
  • USD futures show a 61% chance the Fed will raise rates in Dec
  • Forecast: US Jobs data - 200,000 jobs in Aug ( 4th straight month of over 200,000)
  • China said to order brokerages to boost support for stock market
  • PBOC deposit rate cut passed on more keenly as bank strains show
  • Goldman Sachs Group Inc. cut its forecast for Chinese growth
  • Japan -Third time unlucky for Abenomics as inflation drops back to zero
  • Today: Euro-zone CPI estimate, Italy CPI
  • No. of active rigs seeking oil in U.S. rise for 6th week to 675 (May high)
  • CBOE Crude Oil Volatility Index rose to 5-month high Friday


GOLD
MARKETS

  • Gold stop flat at $1,134.33 in early Asian hours from $1,133.55 close Friday
  • Gold had risen 0.8 % on Aug. 28, but had a first weekly fall after 3 weeks of gain
  • Gold futures Dec flat at $1,133.90, after a 1 % gain on Friday.
  • Silver spot fell 0.3 % to $14.5553

FACTORS

  • Federal Reserve officials reflecting on a potential interest rate increase in the U.S.
  • Bets on a Sep Fed rise climbed after Vice Chairman Fischer said inflation will rise


CRUDE OIL
MARKETS

  • WTI falls, heads for 3rd monthly decline
  • WTI fell this month below $40/bbl for 1st time since Feb. 2009
  • WTI Oct at $44.36/bbl early Asian hours
  • Total volume double the 100 day moving average
  • WTI prices -5.4% in Aug., set for 3rd monthly drop
  • Brent Oct down $1.03 at $49.02/bbl
  • Brent-WTI spread for Aug end at $4.65/bbl vs $5.09 Jul end .

FACTORS

  • U.S. drilling activity shows no signs of slowing even as global glut persists.
  • No. of active rigs seeking oil in U.S. rise for 6th week to 675 (May high)
  • CBOE Crude Oil Volatility Index rose to 5-month high Friday