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Daily Newsletter - 19th June 2024

Team Harmoney

India’s current account deficit is expected to be less than 1% in  2023-24, according to Reserve Bank of India Governor Shaktikanta Das. However, with his assertion that the RBI will continue to build reserves, the central bank will likely keep a vice-like grip on the rupee. India could see foreign exchange reserves rising to new highs while the rupee occasionally hits new lows.

Top 3 Leads Today

  • Fitch ups India's FY25 GDP growth forecast by 20 bps to 7.2%
  • Rural demand picking up, likely to hold this year: RBI Governor Das
  • Advance tax collection surges 27.34% to Rs 1.48 trillion in the June quarter so far

Indian Markets

  • Money Markets Minute: The call money rate ended at the RBI’s repo rate of 6.50% Tuesday due to strong demand for funds from banks caused by outflows for advance tax payments.
  • Government Bond Brief: Government bond yields closed flat at 6.98% in the absence of strong cues. Foreign portfolio investors were among the buyers despite the overnight rise in US yields.
  • Corporate Bond Beat: Corporate bond yields held steady on Tuesday after a slight decline last week, with traders cautious and avoiding major positions due to muted market signals.
  • Forex Flash: The rupee strengthened Tuesday as banks sold dollars on behalf of foreign investors. The rupee moved in a 14-paise range and closed at 83.4100/$1.
  • Stocks Spotlight: Indices surged to record highs on Tuesday, driven by expectations of stable post-election policies. Strong corporate profitability is expected to continue. Nifty closed at 23,557.90 points, its highest level yet, up 0.4%.

International Markets

  • US Stocks:  On Tuesday, the S&P 500 and Nasdaq reached new highs driven by Nvidia's ongoing surge, while the Dow saw a modest rise in quiet pre-holiday trading after weaker-than-expected US retail sales figures. In May, retail sales increased by 0.1%, falling short of the 0.3% growth predicted by economists.
  • US Treasuries: Yields fell across the maturity curve on Tuesday after disappointing US retail sales data. A reduction of about 8 basis points in the two-year yield, to 4.69%, drove the slide, while the 10-year benchmark treasury was down 6 basis points to 4.219%. The US Federal officials said they cautiously expect an end-of-year interest rate reduction.
  • Dollar: The dollar index remained steady against a major basket of currencies at 105.30 on Tuesday. The euro gained following the release of retail sales data that suggested a possible decline in consumer activity in the US. Investors expect the US Federal Reserve to cut its key interest rate.

Traded volume(in Cr) in corporate bonds by sector and maturity:

Macro Sectors 0-1y 1-3y 3-5y 5-10y >10y
Financial Services 1,121 1,412 881 1,246 2
Utilities 68 488 3 3
Diversified 10 76
Consumer Discretionary 100 3
Telecommunication 75 12

Secondary trade details for recently issued primary corporate bonds:

Security Name

LTY (%)
7.44 IRFC 13JUN34 13-Jun-24 885.00 7.48 7.43
8.55 HDB PERP - C 13-Jun-24 150.00 8.53 8.53
9.16 360ONEPRIME 12JUN27 12-Jun-24 75.00 9.67 9.90
8.55 MASFINANCIAL 06DEC25 6-Jun-24 117.25 9.39 10.20
7.50 IREDALTD 05JUN34 5-Jun-24 425.39 7.50 7.50
8.67 AXISFIN PERP - C 4-Jun-24 182.00 8.47 8.07
9.09 MUTHOOT FIN 01JUN29 3-Jun-24 305.00 9.08 9.08
9.00 CHOLAINVFIN 03JUN34 3-Jun-24 150.00 8.99 8.99
9.25 SKFL 03JUN26 3-Jun-24 100.00 9.75 9.75

‌Source: Harmoney data analytics

Events This Week

June 19, Wednesday:

  • EIA to release US crude oil inventory report

June 20, Thursday:

  • Bank of England monetary policy decision

June 21, Friday:

  • RBI to auction ₹330 billion worth of government bonds

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