{LONGTERMINVESTORS} Fwd: Morning Market Starter - August 29, 2016

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From: <research@icicibank.com>
Date: Mon, Aug 29, 2016 at 11:24 AM
Subject: Morning Market Starter - August 29, 2016
To: stockdesai@gmail.com

On the radar: Markets await US PCE inflation data for July, due later today   Central Bank watch:   Federal Reserve Chair Janet Yellen signaled that the case of a rate hike has "strengthened" in recent months. However, she emphasized that no decisions have been made and forecasts are uncertain. She went on to say that the Fed is not out of ammunition should a recession hit the US economy. The Chair said that the Fed is also considering buying assets beyond government bonds and mortgage backed securities, but not actively. o Federal Reserve Vice Chairman Stanley Fischer said Janet Yellen's comments leave the possibility open for a September rate hike. He stated that the US economy is close to full employment and numbers have been better than they have been for some time. o Federal Reserve Governor Jerome Powell said that there is no preset course for raising rates. He added that the Fed can afford to be patient, but inflation moving towards its 2% target and the labour market tightening should be reason enough to hike interest rates. Bank of Japan Governor Haruhiko Kuroda stated that the bank will carefully consider how to use the policy scheme to achieve the price stability target and ease further if needed. He said that the zero bound is no longer insurmountable and there exists another lower bound. He added, the current rate is still far away from such a lower bound. Chart: US Q2 2016 GDP print (second reading) was revised downwards to 1.1% QoQ (ann.) from 1.2% QoQ (ann.) Global market developments:   Macroeconomic data: o US: Q2 2016 GDP print (second reading) was revised downwards to 1.1% QoQ from 1.2% QoQ. University of Michigan consumer sentiment came in lower at 89.8 vs. 90.4 previously. o UK: Q2 2016 GDP print came in unchanged at 0.6%. US markets ended in the red on Friday after commentary by Fed officials, including Janet Yellen. Dow Jones and S&P 500 ended lower by 0.3% and 0.2% respectively. Asian equities are trading mixed this morning. Nikkei (+2.4%) is leading gains in the region on account of a weaker Yen. Australia's ASX (-1.1%), Hang Seng (-0.3%) and Kospi (-0.3%) are posting losses. Meanwhile, Shanghai Composite is trading flat. US Treasury yields are trading slightly lower today, albeit holding on to Friday's gains. Yields rose ~6 bps post Yellen's Jackson Hole speech. The 10Y benchmark yield is presently trading at 1.62% vs. the previous close of 1.63%. Global market snapshot *UK Market holiday Domestic market developments: Indian Rupee is trading weaker against the Dollar at 67.17 levels vs. the previous close of 67.06. Indian equities are trading in the red this morning. Sensex and Nifty are trading lower by 0.1% each.  Indian Government bonds are trading slightly lower today. The 10Y benchmark yield is currently hovering at 7.14% vs. the previous close of 7.13%. Regards, ICICI Bank Contact: Radhika Wadhwa (+91-22) 2653-1414 (extn: 7206) radhika.wadhwa@icicibank.com Sonal Surana (+91-22) 2653-1414 (extn: 7243) sonal.surana@icicibank.com Pradeep Goyal (+91-22) 2653-1414 (extn: 6229) goyal.pradeep@icicibank.com ​

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CA. Rajesh Desai

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