NiftyforAll: Weekly Review

Saturday, May 07, 2016

Weekly Review - 09.05.2016

Dear All,

> CURRENCY WAR ERUPTS AS G7 NATIONS RACE TO DEVALUE <

This week brought heightened volatility to the currency market as the view that a full-fledged currency war to see who can devalue and weaken its currency the most is well underway gathered pace. Australia’s central bank fired its shot on Tuesday, when it cut its benchmark interest rate to a record-low 1.75%, prompting the Aussie to tumble more than 2% against the U.S. dollar. Meanwhile, the People's Bank of China on Wednesday set the yuan's daily reference rate at 6.4943 to the dollar, weakening the currency by about 0.6% (USD/CNY). The cut by China's central bank was the biggest downward move since it devalued the currency in August and rattled markets worldwide. Elsewhere, the euro rose to an eight-month high earlier this week, despite repeated attempts by European Central Bank officials to talk down the currency. The biggest loser of all so far is Bank of Japan Governor Haruhiko Kuroda, who saw the yen strengthen to an 18-month high against the U.S. dollar this week after the BoJ held off from expanding its monetary stimulus late last month.

>>> Fed rate hike odds for June move even lower after nonfarm payroll miss <<<

The likelihood of the Federal Reserve (Fed) increasing interest rates at its next meeting dropped even further on Friday after the monthly employment report for April missed expectations.
The U.S. economy created only 160,000 nonfarm payrolls in April, missing consensus estimates for 202,000 new job contracts and causing concern over the state of the labor market.
The Fed was closely following the health of jobs stateside as part of its determination to support the U.S. economy.
Odds dropped on the poor jobs report with federal funds futures pricing in the probability of a rate hike at the end of the Fed’s next meeting on June 15 to just 6%, according to CME Group data, compared to 10% before the publication of the nonfarm payrolls and 20% a month ago.
On Wednesday, Minneapolis Fed president Neel Kashkari had indicated that, as long as inflation remained low, the Fed should concentrate on its employment mandate.
The federal fund futures pointed to December as the market’s best guess for the next move in policy tightening with a probability of 52%.
Despite the low probability of a move in June, four Fed officials attempted to convince the market on Thursday that the door was still open to the possibility.

>>> LAST WEEK - HAPPENING <<<

The Nikkei purchasing managers’ index (PMI) survey showed that rate of manufacturing growth decreased to 50.50 in April from the eight-month high of 52.4 in March as rise in new orders lost steam.

Also, growth in India's services firms fell to a four-month low of 53.7 in April from 54.3 in March on the back of new business growing slower than the previous months.

In contrast, the combined output of eight crucial infrastructure sectors jumped to a 16-month high of 6.4 per cent in March due to a double-digit growth in refinery products, fertilizers, cement and electricity.

On the global front, Japanese stocks tumbled as the yen surged to 1-1/2-year high against the dollar while the Chinese shares plunged on deceleration in China's manufacturing activity in April 2016.

>>> WHAT'S NEXT <<<

Trend in global markets, FII stance, the movement of rupee and crude oil price will set the tone for the markets in the coming week.

HUL, Zee Entertainment Enterprises, Kotak Mahindra Bank, Asian Paints, Nestle India, Glenmark Pharma, Cadila Healthcare among others will announce their quarterly results next week.

Meanwhile, government is scheduled to unveil industrial production data for March and the consumer price index (CPI) data for April 2016 on Thursday.

On the global front, the Bank of England (BOE) monetary policy committee members will vote on where to set the rate and Germany's Q1 Gross Domestic Product (GDP) data will be unveiled on Friday, 13 May 2016.

>>> Nifty Daily Chart <<<

>>> Click the chart to see on full screen <<<

RSI getting support from trend line, if holds, price may see a pull back rally soon.

>>> Nifty Hourly Chart <<<

>>> Click the chart to see on full screen <<<

Many alternatives available here on all front. Here is one among it. If this count is not wrong - We may see an C Wave Rally. 7680 is a good support and a break above the wedge may see a good pull back rally from here.

>>> Bank Nifty Hourly Chart <<<

>>> Click the chart to see on full screen <<<

Bank Nifty Hourly - Assumed as A-B-C. If not wrong, Wave C on the way. Key support as mentioned on chart should hold for a rally.

>>> TATAMOTORS - Profit Booked Rs.30,000/- <<<