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Category: Financial Market

  • US dollar clings to gains as bets on further Fed hikes firm

    The dollar fought for a footing in choppy trade on Thursday, with support from upbeat U.S. data and hawkish policymaker comments, while the prospect of higher energy prices helped exporters’ currencies and weighed on those of importers.

    The dollar rose 1% on the euro and 1.3% on sterling overnight and was trying to hold those gains in bumpy early trade in Asia. The euro has now made two unsuccessful attempts to regain parity this week and last bought $0.9916. Sterling’s rebound from record lows has paused just below $1.15.

    The U.S. services industry posted another month of expansion in September, data showed overnight, while labour market figures were solid and the trade deficit narrowed. San Francisco Fed President Mary Daly reiterated policymakers’ focus on inflation fighting and dismissed market hopes for rate cuts in 2023.

    “I think that just reminded people that you might be a bit premature in trying to price in rate cuts in the U.S.,” said Westpac currency strategist Imre Speizer.”That pushed up rates and pushed up the U.S. dollar,” he said, as the Federal Reserve’s aggressive moves to rein in inflation sets the pace for central banks around the globe.

    “Its one trade for the whole world,” said Speizer. “No one currency’s interest rates are really able to go off and do their own thing independently.“

    Bond markets globally sold sharply. Interest rate futures imply more than 130 basis points of tightening ahead for the Fed before the middle of next year. [US/][GVD/EUR][GB/]

    The U.S. dollar index wobbled 0.06% lower to 110.86, off lows near 110 from earlier in the week, though some distance below last week’s 20-year high of 114.78.

    Sterling last bought $1.1367, while the Australian and New Zealand dollars each rose about 0.4%, taking the Aussie to $0.6518 and the kiwi to $0.5772. [AUD/]

    The yen, which has been held steady by the risk of further Japanese intervention, sat at 144.57 per dollar.

    The Saudi Arabia-led cartel of oil producers agreed to steep production cuts on Wednesday, lifting Brent crude futures to a three-week high of $93.99 a barrel. [O/R]

    “Higher energy prices would have a much more direct impact on the European region given the more direct relationship to their finances,” said NatWest Markets’ strategist Jan Nevruzi.

    Later on Thursday the European Central Bank releases minutes from last month’s policy meeting. Traders are also awaiting Friday’s U.S. labour market data to gauge how fast and far the Fed might be willing to lift interest rates.

  • Gold Steadies Above $1,650 As Safe Haven Appeal Creeps Back in

    Gold Steadies Above $1,650 As Safe Haven Appeal Creeps Back in

    Gold prices steadied above a major support level on Monday as growing risks of an economic recession spurred some safe-haven demand for the yellow metal Prices also recovered marginally from a bruising September, where they dropped 3%. Bullion prices marked their worst quarter since March 2021 with a Spot rose 0.2% to $1,663.99 an ounce, while gold futures were flat around $1,672 an ounce by Prices of the yellow metal were steady even as on Friday showed inflationary pressures remained elevated and were likely to invite more rate hike pain from the Federal Reserve.




    But fears that more interest rate hikes could slow economic growth, coupled with a brewing financial crisis in Europe and the UK invited some safe haven buying into gold. Data on Monday also showed Japanese business sentiment  worsened in the third quarter.

    Bullion Prices Also Benefited From An Easing Dollar, Which Retreated From 20-Year Highs. The Dollar Index Was Largely Flat On Monday.

    Gold has fallen sharply from 2022 highs hit during the onset of the Russia-Ukraine war, as the opportunity cost of holding the metal grew in tandem with rising interest rates across the globe This trend is widely expected to weigh on bullion prices in the coming months, as several central banks hike rates even further to battle stubborn inflation. On that front, gold appears to have largely failed as an inflation hedge this year, trading down Still, prices of the yellow metal may see some short-term relief especially if the dollar weakens further.




    Among Industrial Metals, Copper Prices Fell Further On Monday As Negative Signals From Japan’s Manufacturing Sector Added To Concerns Ver Demand For The red Metal.

    Copper futures fell 0.2% to $3.3830, after falling sharply in September A survey by the Bank of Japan showed major manufacturers in the country grew less optimistic about their business prospects in the third quarter, which could signal weakening industrial trends in the world’s third-largest economy. The data also comes after Chinese PMI  readings last week showed that activity in the world’s second-largest economy remains under pressure Copper prices have plummeted this year as rising interest rates weighed on economic activity, severely denting demand for the industrial metal.

  • Govt hikes DA By 4% Under 7th Pay Commission; Details Here

    Govt hikes DA By 4% Under 7th Pay Commission; Details Here

    The Union Cabinet has hiked the  Dearness Allowance (DA) of central government employees and pensioners by 4 percent under the 7th Pay Commission The hike takes DA to 38 percent from the current 34 percent of basic pay/pension. The Finance Ministry said that the central government employees and pensioners will become entitled to a higher amount of Dearness Allowance (DA) and Dearness Relief (DR), respectively.

    Financial News



    Speaking at a press conference in New Delhi, the Union Minister added that the hike in salary and pension will benefit over 50 lakh government employees and about 62 lakh pensioners ahead of the festive season.  Meanwhile, Finance took to Twitter to add that the combined impact on the exchequer on account of both DA and DR (Dearness Relief) would be R s 12852.5 crore per annum.

     release additional instalment of Dearness Allowance (DA) to central govt employees & Dearness Relief (DR) to pensioners w.e.f.

    Further, the combined impart on the exchequer on account of both DA and DR will be Rs.8,568.36 crore in the financial year 2022-23 (i.e. for a period of 8 months from July, 2022 to Februar The Union Cabinet had in March approved to increase 3 per cent in dearness allowance (DA) under the 7th Pay Commission, thus taking the DA to 34 per cent of the basic income.



    Dearness Allowance (DA) is the cost-of-living adjustment allowance which the government pays to the employees of the public sector as well as pensioners of the same revised the formula to calculate the DA and DR for central government employees and pensioners Dearness Allowance Percentage  ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)x100.For Central public sector employees: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months.

  • Gold prices are down Rs 270 per kg, while silver is up Rs 60,000 per kg

    Gold prices are down Rs 270 per kg, while silver is up Rs 60,000 per kg

    On Thursday morning, gold prices in India fell by Rs 270 per gramme. After a Rs 250 drop, 10 gramme of 24-carat gold is trading at Rs 51,440, while 10 gramme of 22-carat gold is trading at Rs 47,150. The drop in gold prices comes after the raised interest rates for the first time since 1994 and warned of economic concerns.


    Silver, on the other hand, has seen a price increase. After a 200-rupee hike, 1 kilogramme of silver now costs Rs 60,000.

    The price of a gramme of 24-carat gold is Rs 51,440 in Delhi, Mumbai, Kolkata, Bangalore, and Hyderabad. Meanwhile, a gramme of 22-carat gold costs Rs 47, 170 in Delhi, Bangalore, Bhubneshwar, and Mangalore. In Chennai, a gramme of 24-carat gold costs Rs 51,500 while a gramme of 22-carat gold costs.



    In Delhi, Mumbai, and Kolkata, on the other hand, silver is trading at Rs 60,000 per kg. 1 kg of silver costs Rs 66,000 in Chennai, Bangalore, and Hyderabad By 4:09 p.m., spot gold had risen 1.4 percent to $1,833.42 per ounce. EDT (Eastern Daylight Time) (2009 GMT). The dollar’s depreciation boosted gold’s appeal among international buyers, while the benchmark U.S. dollar fell. Treasury yields have also fallen.

  • Interest rates on retail and bulk term deposits have been raised by the SBI

    Interest rates on retail and bulk term deposits have been raised by the SBI

    State Bank of India (SBI), the country’s largest lender, has increased interest rates on retail term deposits by 15 to 20 basis points on several tenors, effective June 14

    It has also increased interest rates on bulk term deposits by 50 – 75 basis points (bps) on certain tenors at the same time The term deposits (below Rs 2 crore) with a 211-day to less than 1-year duration has been raised by 20 basis points to 4.60 percent, up from 4.40 percent previously.
    Similarly, interest rates on retail term deposits with a tenor of one year to less than two years have been raised by 20 basis points to 5.30 percent, while rates on retail term deposits with a tenor of two years to less than three years have been raised by 15 basis points to 5.35 percent


    .



    The lender has increased the interest rate on bulk deposits of Rs 2 crore and above by 50 basis points to 3.50 percent and 4%, respectively.

    in the 7-day to 45-day tenor and 46-day to 179-day tenor. Similarly, the interest rates on 180-210-day tenors, 211-day tenors, and 1 year to less than 2-year tenors have been raised by 75 basis points to 4.25 percent, 4.50 percent, and 4.75 percent, respectively The rise in deposit rates follows the Reserve Bank of India’s (RBI) Monetary Policy Committee’s rate action in June, when the benchmark policy rate was raised by 50 basis points to 4.90 percent. In an unexpected off-cycle meeting, the six-member rate-setting panel raised the repo rate by 40 basis points to 4.40 percent.




    The institution raised the interest rate on its bulk term deposits (Rs 2 crore and beyond) by 40–90 basis points in early May, shortly after the MPC raised the repo rate by 40 basis points While lenders have been fast to pass on the higher rate to borrowers since many of the loans are tied to an external benchmark, the transfer of the new rate to the liabilities has been delayed.

  • In Early Trade He Rupee Fell To An All-Time Low 78.29 Versus The US Dollar

    In Early Trade He Rupee Fell To An All-Time Low 78.29 Versus The US Dollar

    In early trade on Monday, the rupee fell 36 paise to an all-time low of 78.29 versus the US dollar, reflecting the strength of the US currency outside as investors rushed to the safe-haven currency amid an overall risk-averse mood Investor morale was pulled down by weak Asian currencies, a trend in local stocks, and continued foreign capital outflows, according to forex dealers The rupee began at 78.20 versus the US dollar on before losing momentum to quote at 78.29, a new low, down 36 paise from the previous closing The rupee fell 19 paise to a new lifetime low of 77.93 versus the US dollar on Friday.






    Weak global sentiments, as well as weak Asian and European currencies, have caused the rupee to start below 78, despite the RBI’s efforts to keep it below 77.70.

    We’ll have to keep an eye on the RBI in the coming days to see how it acts Head of Treasury, Anil Kumar Bhansali, stated Brent crude futures declined 1.46 percent to USD 120.23 a barrel, the global benchmark In the meantime, the dollar index, which measures the strength of the greenback against a basket of six currencies, was up 0.30 percent at 104.45.

  • In early trade, gold is up Rs 270, while silver is up Rs 62,200 per kilogramme

    In early trade, gold is up Rs 270, while silver is up Rs 62,200 per kilogramme

    On Friday, the price of gold rose by Rs 250 from the previous day’s closing to Rs 52,310 for a gramme of 24-carat gold. In the meantime.

    a gramme of 22-carat gold costs Rs 47,950. Although gold is utilised as an inflation hedge, rising interest rates raise the opportunity cost of owning the non-yielding asset Silver, however, began marginally higher on Friday, trading at Rs 62,200 per up to Rs 100 from the previous day. For the day, a gramme of 24-carat gold costs Rs 52,310 in Delhi, Mumbai, Bangalore, Hyderabad, and Kolkata. In Delhi, Mumbai, Bangalore, Hyderabad, and Kolkata, a gramme of 22-carat gold costs Rs 47,950.

    On Wednesday in Chennai, a gramme of 24-carat gold and a gramme of 22-carat gold were trading at Rs 52,430 and Rs 48,060, respectively.

    Silver, on the other hand, is selling for Rs 62,200 a k in Mumbai, Delhi, and Kolkata. The precious gold is selling for Rs 68,000 per in Chennai, Bangalore, Hyderabad, and Kerala According to a government source in May increased 677 per cent year on year to the highest level in a year, as price corrections right before a critical festival and wedding season encouraged retail Increased imports by the world’s second-largest bullion user might bolster benchmark prices, but they could also widen India’s trade imbalance and put pressure on the rupee Gold is set to decrease for the week as Treasury rates increase, with investors looking for clues on the future of monetary policy from important monthly US inflation data expected later in the day As of 0038 GMT, spot gold was down 0.1per cent at $1,846.22 per ounce, while U.S. gold futures were down 0.2 per cent at $1,849.10. Silver has down 0.1 per cent to $21.65 per ounce on the spot market.

  • The rupee falls to an all-time low of 77.74 per dollar

    The rupee falls to an all-time low of 77.74 per dollar

    The rupee fell to a new all-time low against the US dollar on Wednesday, ending at 77.74, slightly lower than its previous close of Despite continued foreign capital outflows and higher global crude oil prices, the local currency traded in a limited range The previous low was set on May 19, when it closed at 77.73 against the dollar, but it had hit 77.80 levels during intraday trade on May 17 USD-INR volatility may continue to be minimal. Anindya Banerjee, the vice-president, of currency options & interest rate derivatives, Kotak Securities, stated, “A range of 77.40 to 78.00 remains in play in the short term.





    Bond prices climbed following the Reserve Bank of India’s monetary policy committraiseding the policy repo rate by 50 basis points bps in line with market expectations.

    and keeping the status quo on banks cash reserve requirements. The three-year government bond rate fell 9 basis points, while the five-year bond yield fell 7 basis points. The four-year paper’s yield fell 8 basis points According to statistics from the the yield on 10-year government bonds (6.54 percent 2032) was 7.51 percent at the start and 7.49 percent at the close Given the high level of inflation, the market has priced in the magnitude of the repo rate rise. Bond rates are projected to fluctuate in a range for the time being, according to dealers and experts The RBI governor has previously stated that a rate hike was a ‘no brainer,’ according to Madan Sabnavis, chief economist of Bank of Baroda. “As a result, the 10-year yield was largely constant between 7.47 and 7.5 percent under the present regime.” In the short run, the yield on 10-year paper is projected to remain range-bound,” he added. As the RBI works toward a more controlled drawdown of liquidity, the yield might rise to 7.75-8%, he noted.

  • On Tuesday, the dollar struggled to find buyers as the market mood improved

    On Tuesday, the dollar struggled to find buyers as the market mood improved

    allowing the currency to remain reasonably resilient against its peers. Eurostat will publish the euro area’s first-quarter Gross Domestic Product (GDP) numbers. Later in the day, a 10-year US Treasury note auction will take place, and the US Census Bureau will release statistics on Wholesale Inventories. The trade action might continue muted ahead of the European Central Bank’s (ECB) policy announcements on Thursday and the US inflation data on Friday Despite the lack of high-impact data announcements, Wall Street’s major indexes rose sharply on Tuesday. US stock index futures, on the other hand, are down between 0.3 and 0.4 percent so far on Wednesday, indicating a cautious market sentiment. The US Dollar Index, which measures the value of the dollar against a basket of six major currencies, is up slightly at 102.50.






    The raised its key repo rate by 50 basis points to 4.9 percent on Wednesday, while keeping the reserve repo rate at 3.35 percent constant.

    After initially soaring to 77.95, the USD/INR has recovered to 77.70 China’s Vice Commerce Minister stated in a statement a day before the release of the country’s trade balance figures that importers and exporters are still under pressure owing to logistical issues and rising material prices. On Tuesday, the EUR/USD fell to a five-day low of 1.0652 before recovering its losses. In the European session, the pair is trading just below 1.0700.





    After dipping to a multi-week low below 1.2500 on Tuesday, the GBP/USD closed the day in positive territory, aided by risk flows. The pair has been maintaining its gains below 1.2600 at the time of writing.

    Above 133.00, the USD/JPY is at its highest level in 20 years. Japan’s GDP dropped by 0.5 percent on an annualised basis in the first quarter, according to official figures. On Wednesday, Bank of Japan Governor Haruhiko Kuroda stated that his comment on families’ acceptance of price rises had been withdrawn. “Rapid currency weakness in a short period of time, as observed recently, is undesirable,” Kuroda continued, although his words did not help the yen find buyers On Tuesday, gold took advantage of falling US T-bond rates to end a two-day losing skid. In the European session, XAU/USD appears to have stabilised at Bitcoin is continuing to fall after suffering minor daily losses on Tuesday, and was last noted around $30,500, down 2% on the day. Ethereum remains on the back foot, trading within a hair’s breadth of $1,800.

  • Ahead of the RBI policy announcement, India’s 10-year bond rate reaches 7.5 percent, the highest level since 2019

    Ahead of the RBI policy announcement, India’s 10-year bond rate reaches 7.5 percent, the highest level since 2019

    In early trade on Monday, India’s benchmark 10-year bond yield hit its highest level since March 2019 as investors braced for a 50-basis-point rate hike later this week while rising global crude oil prices weighed on the mood.







    The 10-year bond yield in India was trading at 7.4965 percent, up 4 basis points from the previous close. The yield climbed to 7.5004 percent, its highest level since March 22, 201 The will focus on interest rate rises in the coming months in a relatively short tightening cycle, with the repo rate expected to hit its terminal level early next year Oil prices jumped more than $2 in early trading on Monday as Saudi Arabia boosted pricing for its oil sales in July, indicating how tight supply remains despite OPEC+ agreeing to increase output over the next two months.