{LONGTERMINVESTORS} Fwd: Morning Market Starter- May 02, 2016

---------- Forwarded message ----------
From: <research@icicibank.com>
Date: Mon, May 2, 2016 at 10:31 AM
Subject: Morning Market Starter- May 02, 2016
To: stockdesai@gmail.com

Central Bank watch: Dallas Fed President Robert Kaplan commented that a monetary action in Fed's June policy meeting will factor in incoming data and the possibility of Brexit in UK's upcoming referendum. He further added that uncertainties stemming from such an event will create some "instability" in currency and bond markets. Additionally, he showed confidence in the strength of the US economy. European Central Bank Executive Board member Benoit Coeure cited that giving up on inflation monitoring will impact on the credibility of the Central Bank and create instability. He also said that while low interest rates may weigh on savers, it benefits employees, tax payers and borrowers. o ECB Governing Council member Jens Weidmann backed the ECB's policy decision, saying that Central Banks seek to "protect people against inflation". Chart: Eurozone's Q1 2016 GDP (advance estimates) edged higher to 0.6% QoQ (ann.) vs. prior print of 0.3% QoQ (ann.) Global market developments: Macroeconomic Data: o EZ: Unemployment rate for March slid slightly to 10.3% from previous (revised) print of 10.4%. Headline CPI slipped into the negative territory, coming in at (-) 0.2% YoY vs. a flat reading previously. Core inflation also reduced to 0.8% YoY vs. 1.0% YoY earlier. Q1 2016 (advance estimates) Q1 2016 GDP (advance estimates) edged higher to 0.6% QoQ (ann.) as against prior print of 0.3% QoQ (ann). o US: March PCE inflation came in as expected at 0.8% YoY vs. previous reading of 1.0% YoY. Core inflation declined slightly to 0.8% YoY from 1.0% YoY earlier. Chicago PMI showed a fall in April to 50.4 levels vs. prior reading of 53.6. University of Michigan sentiment index also lowered to 89.0 levels in April (final reading) as against 89.7 levels previously. US equities ended in the red on Friday as a slew of downbeat data prints weighed on the indices. Dow Jones and S&P ended 0.3% and 0.5% lower respectively. Asian equities are trading in the red this morning, tracking weak cues from their US counterparts. Downbeat data prints from Australia are weighing on the indices. Nikkei (-3.6%), Kospi (-0.7%) and Australia's ASX (-0.7%) are all posting losses. Meanwhile, markets in China and Hong Kong are closed today on account of a holiday. US Treasuries are trading marginally higher amid some softness in risk sentiment this morning. The 10Y benchmark yields are currently at 1.82% vs. Friday's close of 1.83%. Global market snapshot Domestic market developments: Indian Rupee opened flat this morning at 66.34 levels, same as Friday's close. Indian equities are trading in the red today, in line with global markets. Nifty and Sensex are down 0.7% each. Indian Government bonds are trading slightly higher this morning. The 10Y benchmark yield is currently trading at 7.43% vs. Friday's close of 7.44%. 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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