Caveat – Views are personal and only for knowledge sharing. No commercial interest involved in bringing this on wordpress platform. Only idea is to consolidate daily content on one platform and no liability on part of mig if these inputs are applied for making investment decisions without carrying out your own due diligence
- बोल दो मीठे बोल सोनिए, मिट्टी का है मोल सोनिए….the day I get to reconnect to my era or get that doze of appreciation, दिल सच में शायराना हो जाता है, और आज फिर दिल शायराना है – so covering the write up with songs – वैसे भी market में कोई action नहीं है so let me spice it up a bit
- Globally let me start with currency though as it is after 38 years, ever since December 1986 that JPY has scaled 160.63 to a dollar and this is being attributed to ultra lose monetary policy being followed by BoJ, a complete opposite of the US monetary policy
- With dollar index at 105.92 and major contribution coming in from JPY market seems to be in a worrisome zone but BoJ that has already exhausted USD 62 bn in April and May to protect the currency still seems unfazed
- I’m not a currency expert nor have I ever tracked currencies that closely but apparently at this point in time the belief is that the rate hike from BoJ may not have desired impact and once again the authorities may adopt a contrarian policy to US when they start to cut rates. This is the expectation that JPY may regain levels once this sets in
- JPY is more hogging the limelight but then the Euro is also not far behind but that is more political in nature as the surprise French elections to national assembly has put the Euro into a short term tailspin
- The real direction will set in basis the outcome of polls – so till then buoyed by elevated rates, a relatively lose policy in basket mainly Euro, CHF and JPY dollar index will continue to have a field day and I won’t be surprised if it breaches 107 going up to 107.50
- A bit too early to be over bullish on DXY because even the US is at the crossroads and hopes of a cut are still high – all eyes are on the inflation numbers this week and if there is some ease in numbers for sure the DXY may retrace a bit.
- There is another worry that if DXY rises, Gold and Silver may continue to remain under pressure and right now market pundits have started to peg gold at USD 3k and silver at USD 36 at year end
- Once again before the inflation numbers are expected to be released, the US treasury yields have embarked upon upward journey with 10y trading at 4.30%. Whether it is due to waiting period or it had hit the support level it had to turn back from 4.20% and it did. Wall street is absolutely flat and gold on expected lines is once again testing the USD 2300 level trading at USD 2310
- Indian govies are into action right now, there are reasonable volumes at around INR 400 bn a day and the volumes are well spread out as well with share of 10y paper coming closer to 30% unlike 50/60% that we used to see a couple of months back. Yields though touched 7% y’day but a couple of bps here and there is just a trading move
- There is a widespread demand, new segments opening up and indeed a time to go long in govies. Markets will also look at budget for projected borrowings but with robust tax collections and disinvestments I don’t think the number will be worrisome. The spectrum auction prima facie has gone as success and there are many such aces up government’s sleeve to contain deficit
- Those in the market will surely observe that the curve seems to be taking shape as there are volumes in even 5/15/30/40 y papers as well. It must be a treat to watch the curve shaping up and this is all the more reason that one should start getting back into gilts – वो action भरे 11.03/11 ½ / 8.07 के दिन, we were just getting in when 12.29/12.32 used to trade and am not sure this generation of traders has seen a trade in 12.60% or have done a trade at price of 150+ in one security
- यक़ीन नहीं है मगर आज भी ये लगता है, कि मेरे दिल पे उन्हें इख़्तियार आज भी है, while originally I’d thought about this statement to be a best fit for those who’ve been anxiously waiting for correction in the bullish stock market but then I felt it can also fit well in my desire to get back into the bond market
- Having said that those who are looking to explore the romantic angle in this – should I deny or denial is implied? Let’s focus on markets only as nifty scaled another 150 pts to close at 23870 and there have been a series of positives on y’day that one can’t ignore
- Speaker’s election was sort of a floor test and by getting through with a voice vote the government in a way has got six months in hand before next no confidence motion can come in and in a way time to pursue its agenda. Why I’m saying in a way, only because I was never in doubt on stability of this government given 240 is big enough a number to survive with conviction the 5y period
- Then needless to mention the telecom spectrum auction and this in a way has given message to market that it will be business as usual. Telecom stocks were the gainers along with bank nifty. Not a change in view and not a change in opinion, as I’m still advocating caution. My worry is not the rise in market but the pace of rise of market and that persists
- And this brings me to news of the day – some rightsizing going on in the market and at some places experience being sidelined in the name of infusing fresh blood and turning young, for which I’ve another song – अभी तुम को मेरी ज़रूरत नहीं, बहुत चाहने वाले मिल जाएँगे, दर्पण तुम्हें जब डराने लगे, जब जवानी भी दामन छुड़ाने लगे, तब तुम मेरे पास आना प्रिय, मेरा सर झुका है झुका ही रहेगा
- I know everything including life has a shelf life but then there is a way to phase out the old and draft the new one but somewhere the experience that these start ups are offering leaves a lot to question the intent and longevity. This is what I’ve been quoting basis the recent experience of availing the service I’ve had off late and even the regulatory action that has been initiated
- Closing remarks – off the cuff – तू अपने दिल की जवान धड़कनों को गिन के बता, मेरी तरह तेरा दिल बेक़रार है कि नहीं, दबा दबा सा कहीं दिल में प्यार है कि नहीं, like it or not the love for stocks is there and that’s the reason why I say don’t just leave the market, stay invested but gradually and not recklessly
Stay safe, stay healthy, God bless you all, have a great day !!
Regards
Vikas
To get regular updates on your mobile subscribe to my telegram channel
Ebook edition of my books Rewards of a Shortchanged Life and When Life shortchanged Me is given below. Kindle subscribers can read it for free. Follow the link
Vikas Miglani writes 