Weekly Macro Data Coverage July 8, 2019

Key Highlights:

  • Weighted average call money rate remains stable at 5.78% for last two weeks of June, 2019
  • Daily liquidity condition stands at Rs. 1.5 lakh crore as on July 8, 2019
  • 10-year US G-Sec continues to remain at close to 2% for past five weeks owing to weak global economic outlook; 10-year Indian G-Sec has been hovering at 6.9%
  • Bid-ask spread for the 10-year Indian G-Sec stands at 0.54 bps in June, 2019, which was at 0.77 bps a year earlier
  • Strong net capital inflows and lower commodity prices has been helping the Indian rupee to appreciate against the USD
  • Iron-ore price has been on upward price for past six months despite global weak demand

Liquidity

The weighted average call money rate remains stable at 5.78% for last two weeks of June, 2019, which is three bps higher than the repo rate. On a daily basis, the banking sector had surplus liquidity of Rs. 80,000 cr. The daily liquidity condition has further increased to Rs. 1.5 lakh crore on July 8, 2019. This indicates WACR rate will drop to below the benchmark rate in July only and liquidity in the system is expected to remain in the at ex-ante positive. Growth in deposit has improved by 10 bps, whereas credit offtake has subsided by 30 bps during the week period. This also hints a further increase in liquidity in the system.

Capital Market

In the global capital market, the 10-year US G-Sec continues to remain at close to 2% for past five weeks owing to weak global economic outlook. In the domestic market, 10-year Indian G-Sec has been hovering at 6.9%. The bid-ask spread for the 10-year Indian G-Sec stands at 0.54 bps in June, 2019, which was at 0.77 bps a year earlier. This gives a sense of strong demand for Indian sovereign bond.

Currency Trend

In the currency market, the forex reserve reached all time high of $427.6 billion with the increase in foreign currency assets. Indian rupee has been appreciating against the US dollar. Strong net capital inflows and lower commodity prices has been helping the Indian rupee to appreciate against the USD. Among the commodity, crude oil, coal and cotton prices on the downward trend. However, ironically, iron-ore price has been on upward price for past six months despite global weak demand.


Interest rates and ratio:

Interest Rate

June 29

May 31

June 7

June 14

June 21

June 28

2018

2019

2019

2019

2019

2019

  Policy Repo Rate

6.25 

6.00 

5.75 

5.75 

5.75 

5.75 

  Call Money Rate (WA)

6.17 

5.90 

5.81 

5.72 

5.78 

5.78 

  364-Day Treasury Bill Yield

7.13 

6.30 

6.19 

6.13 

6.13 

6.16 

  2-Yr Indian G-Sec

7.67 

6.27 

6.21 

6.22 

6.29 

6.17 

  10-Yr Indian G-Sec

7.98 

7.07 

7.04 

6.99 

6.91 

6.93 

  10-Yr US G-Sec

2.82 

2.08 

2.08 

2.06 

2.01 

2.04 

  AAA (Indian corporate) 

9.23 

8.11 

8.11 

8.27 

8.09 

7.95 

  Spread in bps (10Yr Indian-US)

516 

499 

496 

493 

490 

489 

  Credit/Deposit Ratio

72.26 

76.97 

77.25 

  USD LIBOR (3 month)

1.9333 

2.3545 

2.3460 

2.3466 

2.3415 

2.3549 

Source: RBI, Investing.com


Acuité Portfolio Debt Instrument Benchmark Estimates (as on 10 June 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 June 21, 2019

124.91 

96.49 

   As on May 24,2019

124.99 

96.22 

   As on June 22,2018

113.53 

86.14 

   YTD (% change)

-0.06% 

0.28% 

   YoY (% change)

10.02% 

12.02% 

Source: RBI


Money Market Performance

Commercial Paper (Fortnight):

Outstanding (In Rs. Lakh cr)

Amount issued (In Rs. Lakh cr)

   31-Mar-2019

4,830.8 

1013.0 

   28-Feb-2019

5,208.1 

900.8 

   31-Mar-2018

3,725.8 

999.2 

   % Change (MoM)

-7.24% 

12.45% 

   % Change (YoY)

29.66% 

1.38% 

Source: RBI

Indices

 

06-Jul-18

07-Jun-19

14-Jun-19

21-Jun-19

05-Jul-19

   NSE Index

10,772.65 

11,823.00 

11,724.10 

11,788.85 

11,811.15 

   NSE Index Return 

0.54 

-0.40 

-0.84 

0.55 

0.19 

   BSE Index

35,657.86 

39,452.07 

39,194.49 

39,394.64 

39,513.39 

   BSE Index Return

0.66 

-0.41 

-0.65 

0.51 

0.30 


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)


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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