Financial
markets have remained broadly unchanged despite Trump impeachment by the House of Representative. Trump is expected to
get exonerated in a Senate trial, owing to majority of Republicans.
Consequently, S&P index closed little changed at 3191 and US dollar index trading
flat at 97.34. GBP/USD pair found some support near 1.3050, which is
pre-election low. Consumer prices in UK rose by 1.5%, against expectation of
1.4%, lending some support to cable. Later today, Bank of England is expected
to keep its monetary policy stance unchanged. Markets will keenly watch BoE’s
economic assessment given the relative clarity on political front.
On
domestic front, GST council decided against raising tax rate despite dwindling GST
collections. Ironically, RBI Governor, Shaktikanta Das suggested that
prevailing economic conditions are appropriate to deviate 0.5% from fiscal
deficit path recommended by FRBM’s committee. This statement is likely to
resonate with ‘North Block’, which is finding it difficult to maintain deficit.
Consequently, India’s 10 year bond yields rebounded to 6.74% from 6.70%.Yesterday,
USDINR witnessed selling pressure amid plausible PSU inflow. USDINR pair opened
the session on a flat note at 70.99 against previous close of 70.97. USDINR
pair has support at 70.75-70.80 levels and resistance at 71.07-71.12 levels.
Range for the day 70.85-71.10.
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