Weekly Round-Up Week Ended 31st May 2013

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1st June 2013

Weekly Round-Up Hi Promofree Weekly Round-Up gives you all the analysis and reports published by us during the week.  Surge in US Treasury Yields - Good or Bad for INR Bonds? Ten year US Treasury (UST) yields have surged by 50bps over the last one month and at yields of 2.22% are trading at highest levels seen since April 2012. On the other hand Indian ten year bond yields have dropped by 35bps over the last one month and at 7.15% levels are trading at the lowest levels since September 2009. Click here to read full analysis Market Movement Analysis June 2013 - Japanese Yen to Dominate June Trading  The Japanese Yen is fluctuating sharply against the USD at lower levels. The Euro is weakening against the USD. INR is feeling the effects of a strong USD and is threatening to test all time lows. The currency market volatility is hitting equities with the Nikkei down over 13% from highs. The Sensex and Nifty are seeing sharp fluctuations at higher levels. Click here to read full analysis Friday Podcast - Negative Carry May Affect Bidding for IIB The Government of India has announced the first issue of Inflation Indexed Bonds (IIB) since 1997. The bonds are to be issued for an amount of Rs 1000 crores through a competitive bidding process on the 4th of June. The maturity of the IIB is ten years. IIB issued by the government as part of its scheduled borrowing program carries all characteristics of a government bond including repo and SLR (Statutory Liquidity Ratio) status.   Click here to listen to the Podcast Foundations for this Market Rally are Strong The bulls are saying fundamentals are improving while the bears are saying cheap liquidity will vanish.  Bulls are buying while bears are waiting to buy gold that has crashed by 26% from highs seen in 2011. Are the market bulls over optimistic? Will the bears be right on equities crashing and gold rising? Click here to read full analysis Weekly Equity Market Analysis - Equities Will Stutter but Regain Posture Equity markets stuttered last week on worries of the Fed easing monetary stimulus and on worries of economic growth in China. The Fed had spoken about likely easing off of bond purchases in its next few policy meets while China’s manufacturing PMI saw a contracting in May (preliminary reading). Click here to read full analysis Weekly Fixed Income Market Analysis - Liquidity will Improve on Government Release of Funds to Oil Companies The government has agreed to release Rs 45,000 crores of subsidy payments to oil companies for the subsidy bill of 2012-13. The funds paid to oil companies will improve system liquidity. Liquidity as measured by daily average bids for repo in the LAF (Liquidity Adjustment Facility) of the RBI was in deficit of around Rs 97,000 crores last week. Liquidity deficit was Rs 103,000 crores in the week before last. Click here to read full analysis   Arjun Parthasarathy www.investorsareidiots.com arjun@investorsareidiots.com Information herein is believed to be reliable but the editor of Investors are Idiots.com Arjun Parthasarathy does not warrant its completeness or accuracy. Opinions and estimates are subject to change without notice. This information is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The financial markets are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved. Unauthorized copying, distribution or sale of this publication is strictly prohibited. The author of the articles may have investments in instruments that are the subject of the articles. © InvestorsAreIdiots.com. All rights reserved. Not interested in receiving emails from us? Click to unsubscribe.