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India Morning Report: Yen progresses weakness strategy to new levels

Even as Yen progresses jump(down) in currency, Dollar progresses on the long cherished goal of yields going in north just in time for Ben Bernanke to not worry about a lower rate of inflation in his last year on the job, likely to also be seen as end of the Fed’s major push to exit recessionary conditions. It should not have mattered as much to India on Monday morning but the relationship linkages with the global economy are a mainstay of this Capital controlled Economy and even as the outsourcing bug in the US designs reverses for Visa hogging engagement strategies at TCS and Cognizant in light of the new bill, the Dollar chose to strike out against the weak Indian currency. The euro will only strengthen and keep transmission of Yen weakness to Dollar strength obscured and thus today’s morning move looks like the week’s top/bottom mark for the Dollar rupee at 55 (54.90) but then the Euro may take its time to get there as results season is over and the economies are sluggish though avoiding the bigger pitfalls.

Curency apart, BOB as we suggested disappointed big after cutting provisions by more than 40% in the quarter with credit growth null and bettered NPAs marginal at best. Akshaya Trithiya seems to be catching on more into the urban youth mindset as well as the Economy struggles to bounce back.

The IIP performance was a wee bit sluggish than expected for us esp with consumer durables continuing to be negative and the  mining performance also still more negative than reports would have suggested. However, the correction on the nifty is unlikely to be deeper as the Economy’s score is much past the barrier for bears to feel stronger or easier buying opportunities to emerge than around 6000 levels itself, markets resting at 6080 before consolidating in the rest of this series still carrying chances of a plus volatility up move to another Nifty level.

Yen’s moving to 115 levels and probably even 125 later for a longish innings and the Dollar engendered jump in US yields likely to bring back a bigger rush of green in the second half of the year. The Aussie similarily hopes to maintain weakness against the Dollar and keep the commodity gains for its exports as well

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This entry was posted on May 13, 2013 by in Financial Markets and tagged , , , , , , , .


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