Breaking the Vacumn !
When things are not going your way, when everything drifts away , when light turns to fade, just everything kills to wade, when world doubts your existance, pockets question the sustainence, when hope begins to tire and pain is a never ending wire, when voices in the head go loud ” Quitting is not an option” comes the point of refecltion when vacumn goes into suspension and way is made for a new invasion…Ok, is this Nirvana 🙂 Folks those are the thoughts of my friend ” Dollar” I’m only penning them down ! Dollar came out of a vacumn finally today after struggling from all ends over month’s .
USd/INR today broke the 73.90 barrier to enter long lost 74 zone..What drove the move-
- Oil up 10% this month
- US 10 year yields rising to 1.54%
- Equities correcting 1000 points at one point today before recovering 600 points by close. Nifty is at 23 times PE and authorties seem to be getting worried on the fast run up, now questioning the valuations and the uneven progress in economic pockets
- Evergrange looming default over next 26 days
- Not to forget, some profit booking..we like for that !
To be honest, post facto whatever justifications one may give to link the move and I could pen down another 5 factors but reality is Dollar was looking for a breakout ( If you follow my posts, i ahve been bullish dollar for a while) .
After the last week FOMC failed to make any impact despite a hawkish stance, mkts needed to play on alternate catalysts and here comes the yields and the Oil move.
What now: For better part of the year, rupee has been fairly delinked to Oil so l’d be wary of chasing the move just on Oil but yes Yields surely can be a spoilier for the EM’s..Dont forget move to 1.7% on 10 year and then dipping to 1.3 in no time so we still gotta watch and gauge..Is the dollar in a reversal? dont think immediately but it needed some push to reisntate its faith back, that was challenged post FOMC.
What to do : I’d like to sell the rallies and add at 20-25 p upticks and buy only via options for now. Market’s exist for this volatility..Dont fear it, enjoy it !
