Morning Market Starter - December 13, 2013

[Rajesh Desai]

On the Radar: Macroeconomic data prints from India were negative. India's November CPI inflation rose to 11.24% YoY, surpassing consensus of 10.00%. Industrial production reading for October was lower at (-)1.8% YoY vs. consensus (-)1.2% YoY. The US House of Representatives yesterday passed the budget deal that seeks to avert an October-type Government shutdown and would ease USD 63 bn in automatic spending cuts in the next two years. The deal now awaits approval from the US Senate. Central Bank Watch: The Swiss National Bank and Central Bank of Indonesia kept their respective policy rates unchanged in their policy meetings yesterday. Global Market Developments: US stocks ended lower yesterday as upbeat retail sales data fuelled speculation of an early QE-tapering by the Fed. Dow Jones ended lower by 0.66% and S&P 500 closed down by 0.38%. Asian stocks are trading mixed this morning. Shanghai Composite and Kospi are down by 0.6% and 0.4% respectively. However, the Nikkei is up by 0.4% amidst a weaker Yen. Australia's ASX is up by 0.5% amidst speculation of possible rate cuts by the RBA going ahead. US Treasuries are holding on to most of overnight gains. The 10-year benchmark yield rose by 4 bps yesterday from an intraday low of 2.84% to end the session at 2.88% amidst expectation of early QE-tapering ahead of FOMC policy meeting due next week. 10-year yield is currently hovering around 2.87%. Domestic Market Developments: Indian stocks are down by 0.5% amidst higher inflation print and weak overseas cues The Indian Rupee opened weaker at 62.10 vs. yesterday's close of 61.83 Please find detailed currency views in the attached document. Regards, ICICI Bank : Treasury Research Contact: Sunandan Chaudhuri: (+91-22) 2653-7525

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CA. Rajesh Desai