Weekly Macro Data Coverage May 17, 2019

Key Highlights:

  • Liquidity in the banking sector has marginally improved during the second week of May, 2019
  • Spread between repo and call money rate stands at 5 bps during the said period, which was in the negative trajectory over past three weeks
  • Indian sovereign bond has become more attractive for the investors as the spread between 10 year Indian and US bond remain high
  • Indian rupee has depreciated to ten week low of 70.26 during the second week of May, 2019
  • In post US-China trade tension, China is expected to devalue its currency to improve their trade competitiveness

Liquidity

Liquidity in the banking sector has marginally improved during the second week of May, 2019. The spread between repo and call money rate stands at 5 bps during the said period, which was in the negative trajectory over the past three weeks. The credit offtake has declined to 12.9% during the second fortnight of April, 2019. Fall in credit offtake hints the liquidity condition to improve in coming weeks.

Capital Market

The 10 year US sovereign yield has reduced to 2.47% during the second week of May, 2019. The sovereign bond has been witnessing strong demand as investors are concern about global economic outlook after the US-China trade war. On the Indian bond market perspective, the 10-year G-Sec yield has been hovering around 7.4% over past four weeks. The Indian sovereign bond has become more attractive for the investors as the spread between 10 year Indian and US bond remain high.

Currency Trend

The currency of emerging economies including India has been continued to loosing value against the US dollar. The Indian rupee has depreciated to ten week low of 70.26 during the second week of May, 2019. In post US-China trade tension, China is expected to devalue its currency to improve their trade competitiveness. This will drag entire currency market into the ground.

Interest rates and ratio:

Interest Rate

May 11

Apr 12

Apr 19

Apr 26

May 3

May 10

2018

2019

2019

2019

2019

2019

Policy Repo Rate

6.00

6.00

6.00

6.00

6.00

6.00

Call Money Rate (WA)

5.90

6.00

6.05

6.16

6.08

5.95

364-Day Treasury Bill Yield

6.67

6.39

6.45

6.50

6.51

6.54

2-Yr Indian G-Sec

7.63

6.73

6.77

6.76

6.72

6.59

10-Yr Indian G-Sec

7.73

7.40

7.42

7.41

7.40

7.41

10-Yr US G-Sec

2.97

2.56

2.56

2.50

2.53

2.47

AAA (Indian corporate)

8.61

8.49

8.81

8.69

8.65

8.50

Spread in bps (10Yr Indian-10Yr US)

476

484

486

491

487

494

Credit/Deposit Ratio

75.03

76.97

 

77.05

 

 

USD LIBOR (3 month)

1.7050

2.3885

2.3856

2.4000

2.3731

2.3589
Source: RBI, Investing.com


Acuité Portfolio Debt Instrument Benchmark Estimates (as on 10 May 2019):

Category

10-Yr Corporate Yield to Maturity

AAA*

NA

AA+

8.36%

AA

8.87%
Source: Acuité Research; # Discount Factor: 0.063; *Outside Benchmark

Deposit (In Rs. Lakh cr)

Bank Credit (In Rs. Lakh cr)

As on Apr 26, 2019

124.86

96.21

As on Mar 29,2019

125.73

97.69

As on Apr 27,2018

113.81

85.17

YTD (% change)

-0.69%

-1.51%

YoY (% change)

9.71%

12.96%
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

 

18-May-18

26-Apr-19

03-May-19

10-May-19

17-May-19

NSE Index

10,596.40

11,754.65

11,712.25

11,278.90

11,407.15

NSE Index Return

-1.94

0.02

-0.36

-3.70

1.14

BSE Index

34,848.30

39,067.33

38,963.26

37,462.99

37,930.77

BSE Index Return

-1.93

-0.19

-0.27

-3.85

1.25


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