Debt market:
Government bond yields recorded their biggest weekly rise in four weeks, amid lingering fears ahead of US president inauguration speech as traders preferred profit booking amid presidential policy uncertainty
- The benchmark 6.97% 2026 bond yield fell to 6.47% from 6.48% on Friday
- The yield on the US 10-year yield remained steady on Friday at 2.47%. However, currently, it is trading lower on account of profit booking in the absence of policy comments expected from the US presidential inauguration speech.
Forex (US$/INR):
The rupee ended lower as markets participants remain wary ahead of the new US President’s inauguration speech. However, with gains in major currencies, we expect the rupee to remain supported today - The US$ tumbled against major currencies as the President’s inauguration speech disappointed traders awaiting cues on economic spending and stimulus plans. We expect some more profit booking in Trump win wagers in the absence of any details on trade and economic stimulus plans.
US$/INR derivatives strategy:
In the currency futures market, the most traded dollar-rupee January contract on the NSE ended at 68.23. The January contract open interest fell 1.96% from the previous day
- February contract open interest rose 1.88% from previous day
- We expect the US$ to meet supply pressure at higher levels. Utilize upsides in the dollar to go short on the US$INR pair.
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