{LONGTERMINVESTORS} Fwd: Morning Market Starter- April 28, 2016

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From: <research@icicibank.com>
Date: Thu, Apr 28, 2016 at 11:20 AM
Subject: Morning Market Starter- April 28, 2016
To: stockdesai@gmail.com

On the radar: Markets await US GDP print for Q1 2016 (advanced estimate). Central Bank watch: Bank of Japan maintained status-quo in its policy decision this morning, keeping Policy Balance Rate at -0.10% and Monetary Base target at JPY 80 tn. In line with our expectations, US Federal Reserve maintained status quo and kept the Fed funds target range unchanged at 0.25%-0.50%. o Though the policy statement lowered its assessment of economic activity, it noted solid pace of increase in household's real incomes and "additional strengthening of the labour market" in light of firm gains in non-farm payrolls data. While it did not highlight risks from global developments, the Central Bank mentioned that it will continue to closely track global developments. Reserve Bank of New Zealand maintained status-quo in its policy decision today, keeping Official Cash Rate unchanged at 2.25%. The statement highlighted weak global cues due to slow growth in China and other emerging markets. The Central Bank of Brazil maintained status-quo in its policy meeting yesterday and kept its benchmark Selic interest rate unchanged at 14.25%. The Central Bank highlighted that high inflation levels do not leave any room for monetary policy easing. European Central Bank President Mario Draghi commented that the Euro area should make use of low interest rates to administer reforms as the Central Bank cannot impose such policies. He suggested the use of other investment means to channel savings in response to concerns that low interest rates are hurting savers. Bank of England Governor Mark Carney remarked that a Brexit could result in higher inflation and lower growth, a stagflation scenario, as the Sterling will depreciate following such an outcome. Chart: Fed reiterated its "gradual" policy normalisation stance in the April 2016 policy meeting. FOMC continues to expect two rate hikes this year Global market developments: Macroeconomic Data: o UK: Q1 2016 GDP declined marginally to 0.4% QoQ as compared to 0.6% QoQ previously. o JN: Headline CPI in March came in negative at (-) 0.1% YoY vs. prior print of 0.3% YoY. Core CPI also edged lower to 0.7% YoY as against 0.8% YoY earlier. Meanwhile, retail sales and industrial production in March came in significantly improved, with the readings at 1.4% MoM (prior print: (-) 2.3% MoM) and 3.6% MoM (prior print: (-) 5.2% MoM) respectively. US equities ended in the green yesterday as the FOMC maintained status quo in its policy decision yesterday. Dow Jones and S&P ended higher by 0.3% and 0.2% respectively. Asian equities are trading mixed this morning. A strong Yen following Bank of Japan's policy decision has been weighing on Japanese stocks. Hang Seng (0.3%) and Australia's ASX (0.5%) are posting gains. Meanwhile, Nikkei (-2.8%), Shanghai Composite (-0.2%) and Kospi (-0.5%) are trading lower. US Treasuries are trading higher this morning, extending overnight gains that followed the FOMC policy decision. The 10Y benchmark yields are currently trading at 1.83% vs. yesterday's close of 1.85%. Global market snapshot Regards, ICICI Bank Contact: Sonal Surana (+91-22) 2653-1414 (extn: 7243) sonal.surana@icicibank.com Radhika Wadhwa (+91-22) 2653-1414 (extn: 7206) radhika.wadhwa@icicibank.com ​

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CA. Rajesh Desai

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