Weekly Macro Data Coverage Sep 02, 2019

Key Highlights:

  • Call money rate during the fourth week of August stands 5.32%
  • Average liquidity in the system has increased to Rs.1.25 lakh crore over a week time
  • Credit offtake has subsided by 60 bps to 11.65% during the first fortnight of August 2019
  • Growth in deposit, on the other hand, remains healthy at 10.2% during the same time
  • 10-year US sovereign bond has declined to twelve month low of 1.52%
  • 10-year Indian sovereign yield has softened by 12 bps to 6.57% over a week
  • Emerging economies’ currencies continue to remain weak on account of global economic uncertainty and expansionary monetary policy

Liquidity

The call money rate during the fourth week of August stands 5.32%, which is eight bps lower than the repo rate. However, average liquidity in the system has increased to Rs. 1.25 lakh crore over a week time. Excess liquidity is result of waning credit offtake. Over a fortnight, the credit offtake has subsided by 60 bps to 11.65% during the first fortnight of August 2019. Growth in deposit, on the other hand, remains healthy at 10.2%.

Capital Market

In the global capital market, the yield of advance countries has been falling on account of strong demand. The 10-year US sovereign bond has declined to twelve month low. Other negative yielding bonds are also on the downward trend. However, the recently released some high frequency data in the US such as job less claim and crude oil inventory has been showing strong economic fundamental. This is expected to give positive sentiment in financial market as well. On the domestic front, the 10-year Indian sovereign yield has softened by 12 bps to 6.57% over a week. The domestic yield has been volatile due to weak macro indicator and economic booster package.

Currency Trend

In the currency market, the emerging economies’ currencies continue to remain weak on account of global economic uncertainty and expansionary monetary policy. The US dollar has been strengthening against the EUR. This will further weaken the currency of emerging economies. Indian rupee is currently hovering at 71.7 against the US dollar.


Interest rates and ratio:

Interest Rate

Aug 24

July 26

Aug 2

Aug 9

Aug 16

Aug 23

2018

2019

2019

2019

2019

2019

  Policy Repo Rate

6.5 

5.75 

5.75 

5.40 

5.40 

5.40 

  Call Money Rate (WA)

6.39 

5.59 

5.58 

5.45 

5.32 

5.32 

  364-Day Treasury Bill Yield

7.32 

5.98 

5.94 

5.85 

5.77 

5.74 

  2-Yr Indian G-Sec

7.76 

6.01 

5.91 

5.9 

5.9 

5.9 

  10-Yr Indian G-Sec

7.86 

6.62 

6.5 

6.64 

6.69 

6.57 

  10-Yr US G-Sec

1.52 

1.84 

1.75 

1.56 

1.53 

1.52 

  AAA (Indian corporate)

8.65 

7.76 

7.5 

6.96 

7.61 

7.37 

  Spread in bps (10Yr Indian- US)

634 

478 

475 

508 

516 

505 

  Credit/Deposit Ratio

75.36 

76.34 

76.36 

  USD LIBOR (3 month)

1.9181 

2.3504 

2.1043 

2.0953 

2.0959 

2.0936 

  Forward Premia of US$ 1-month

4.62 

3.98 

3.74 

3.7 

4.02 

  US$ 3-month

4.45 

4.09 

4.09 

3.86 

3.9 

4.24 

  US$ 6-month

4.38 

4.31 

4.18 

3.94 

3.96 

4.22 

Source: RBI, Investing.com


Acuité Portfolio Debt Instrument Benchmark Estimates (as on Sep, 03 2019):

Category

10-Yr Corporate Yield to Maturity

  AAA*

NA   

  AA+

8.04%   

  AA

8.65%   

Source: Acuité Research; # Discount Factor: 0.059; *Outside Benchmark


Deposit (In Rs. Lakh Cr)

Bank Credit (In Rs. Lakh Cr)

  As on Aug 16,2019

126.8  

96.83  

  As on July 19,2019

126.49  

96.57  

  As on Aug 17,2018

115.11  

86.73  

  YTD (% change)

0.25%  

0.27%  

  YoY (% change)

10.16%  

11.65%  

Source: RBI


Money Market Performance

Commercial Paper (Fortnight):

Outstanding (In Rs. Billion)

Amount issued (In Rs. Billion)

  30-Jun-19

5,039.40 

1076.9 

  15-Jun-19

5,561.80 

1078.7 

  30-Jun-18

4,918.30 

1267.3 

  % Change (MoM)

-9.39% 

-0.17% 

  % Change (YoY)

2.46% 

-15.02% 

Source: RBI


Indices

 

24-Aug-18

02-Aug-19

09-Aug-19

16-Aug-19

23-Aug-19

  NSE Index

11,557.10 

10,997.35 

11,109.65 

11,047.80 

10,829.35 

  NSE Index Return

0.75 

-2.54 

1.02 

-0.56 

-1.98 

  BSE Index

38,251.80 

37,118.22 

37,581.91 

37,350.33 

36,701.16 

  BSE Index Return

0.80 

-2.02 

1.25 

-0.62 

-1.74 



Liquidity Operation by RBI:



Source: RBI, Acuité Research;
Note: Net injection (+) and Net absorption (-)


Corporate debt (in Rs. Lakh Cr):



Net Debt Issuance by Centre and State Government (Rs. Billion):

Source: Acuité Research, RB


Commodity Price Index (3 Month Moving Average):



Commodity Price Movement (3 Month Moving Average):




USD-INR Movement:




Source: RBI, Acuité Research

                                                                                                                                                               
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