Daily Market Report: Friday - November 9, 2012

The Indian Rupee opened at 54.29 levels after closing yesterday at 54.36 levels. The Intraday range for the rupee is expected between 54.10 - 54.50 levels.

The global Investors will be closely watching how the central government manages its finances and whether it can push through key reforms on insurance and pensions when parliament meets later this month.
The Asian markets are trading lower amid concern Greece's bailout may be delayed and as Australia's central bank cut its growth forecast. In China, the Communist Party is in the process of holding its 18th Party Congress and this high profile event will continue into next week culminating with the introduction of the country's newest leaders.

The Global stocks fell overnight on worries to resolve the "fiscal cliff" in a timely manner before nearly $600 billion worth of spending cuts and tax increases kicks in early 2013 unless a compromise is reached to cut the deficit. There is also the issue of a debt ceiling, which needs to be raised to avoid a government shutdown.
The US trade Balance, unexpectedly narrowed in September opening the door to a modest upward revision to third-quarter real GDP growth. The September's trade deficit of $41.5bn was considerably smaller than the consensus forecast of $45.0bn. The Dollar Index was also seen bouncing above 81 levels after positive economic data.

The Euro was undermined after the European Central Bank kept rates on hold, ECB president, Mario Draghi, sounded downbeat on the Euro zone economy and said that they are ready to start new purchases of bonds.
More worrying signs about the European economy emerged after data showed German exports slid at their fastest pace since late last year, adding to evidence that the Euro zone's debt crisis has begun to inflict a heavy toll on Europe's largest economy.

After winning parliamentary approval for a severe austerity package crucial to get an international aid, a coalition government in heavily indebted Greece still needs to pass the 2013 budget in a vote expected on Sunday.
The US 10 year treasury yield is trading lower at 1.62% compared to 1.68% seen yesterday. The Indian 10-year bond yield closed unchanged at 8.19% ahead of the 130 billion rupee bond sales on Friday.

Outlook: Exporters have sold above 54.60-70 partially, and again sell 54.60 plus levels only for long term partially (8-12 months only). The rupee is expected to be weak with some dips in between as we saw yesterday. Uncovered Importers were recommended to cover close to 54.00 - 54.10 levels again. Overall USD/INR pair remain in bullish trend.

(Source: Corporate Communications Team, India Forex Advisors Pvt. Ltd.)