Call rates remained range-bound in the 6.25%-6.75% region. The Exchange rate was also range bound within the Rs. 48.86-92 / USD. Forward premia were volatile with the benchmark 6 month premia trading near the 6.00%-6.30% levels. Derivatives markets were active with the 1 year OIS trading in the 7.75%-7.80% levels.
Government Securities
A very volatile week as RBI hit the markets with 2 OMO auctions sucking out Rs. 5300 cr. and announced one more 15 year GOI auction due on Monday. The benchmark 10 year yield was volatile in the 15 bps range, and closed higher at 7.25%. The entire yield curve moved up over the week by 15-20 bps. In the primary markets, the 91D Tbill cut-off was traded at another all time low of 5.86%.
* All yields mentioned are annualized and spreads are over annualized GOI Securities.
There was only range bound activity in the corporate bond markets even though the GOI markets were volatile. Benchmark AAA 5 year yields traded at 8.40%-8.50% range. CPs were issued in the 7.60%-7.90% range. No activity in the long term primary issuance corporate market.
The Call rates are likely to remain steady in the 6.25% - 6.75% range and the exchange rate is expected to remain in the Rs. 48.85-95 / USD range. Forward premia may be volatile but well received at higher levels due to comfortable liquidity. GOI security markets are likely to be volatile due to the fresh 15 year auction on Monday. 10 year benchmark yields are likely to trade in the 7.15%-7.35% range. Corporate debt yields are also likely to stay range bound in the current range due to uncertain underlying GOI markets.
DISCLAIMER
The above views are based on the latest available information. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. While the views are proffered with the best of intentions, neither the author, nor the firm are liable for any losses that may occur as a result of any action based on the above. The financial markets, and especially the Indian money markets, are illiquid and inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
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The Call rates are likely to remain steady in the 6.25% - 6.75% range and the exchange rate is expected to remain in the Rs. 48.85-95 / USD range. Forward premia may be volatile but well received at higher levels due to comfortable liquidity. GOI security markets are likely to be volatile due to the fresh 15 year auction on Monday. 10 year benchmark yields are likely to trade in the 7.15%-7.35% range. Corporate debt yields are also likely to stay range bound in the current range due to uncertain underlying GOI markets.
