MARKET UPDATE

RBI COUNTER
* DAILY LAF TENDERS: One set of 1-day reverse repo (at 7.00%) and 1-day repo (at 8.00%). Bids for repo tender may be submitted between 0930 IST and 1030 IST, and reverse repo between 1900 IST and 1930 IST.

MARKETS
Call: Seen opening tad over the repo rate as banks may borrow for indirect tax outflow. May ease intraday. 1-day Call: 7.95-8.15% vs 8.25% 2-day Sat.
Bonds : To take cues from US jobs data on Mon. Hope of fall in Nov CPI may support prices. 10-yr bond yld: 7.90-7.95% vs 7.93% Fri.
Rupee : To take cues from US non-farm payrolls report Mon. Local shares to lend cues. Range: 61.70-62.20/$1 vs 61.77 Fri.
Stocks: Seen opening flat to marginally up. To remain rangebound. Nifty range: 8480-8580, Friday-end: 8538.30, down 26.10 points.

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Highlights of RBI's 5th Bi-Monthly Monetary Policy Statement for 2014-15

MAIN HIGHLIGHTS
* Keeps repo rate unchanged at 8%
* Keeps CRR unchanged at 4% *
*To continue to provide liquidity via term repos
* Continue with overnight repos at 0.25% of bank-wise NDTL
* Continue with 7-, 14-day repos of up to 0.75% NDTL
* Reverse repo remains unchanged at 7%
* MSF, bank rate remains unch at 9%
* To continue with daily one day repo, reverse repos
* Any change in current monetary policy stance "premature"
* Monetary policy stance can change early next year
* Policy stance can change outside policy review cycle
* Policy stance change at current juncture premature
* Monetary conditions, rather than long-term yld view, key to OMO
* RBI to detail 6th bi-monthly monetary policy statement Feb 3
* In talks with govt on new monetary policy framework
* Stronger the information, sooner the policy accommodation
* Conducted OMOs based on assessment of monetary conditions
* Conducted OMO sales worth 401 bln rupees so far Oct-Dec
INFLATION 
* RBI revises central forecast for CPI inflation to 6% for Mar 2015
* Stance change can be outside review cycle
* Nov inflation expected to show further softening
* Inflation is expected to retain some momentum over 12 mos
* Risks to Jan 2016 6% CPI aim evenly balanced
* Expect Dec CPI inflation to rise above current level
* Expect Dec CPI inflation to rise above current level
* "Durability of upturn" in inflation key uncertainty
* March 2015 CPI inflation forecast cut to 6%
* Change in policy stance likely next year if inflation eases
* Headline inflation has been receding steadily
* Favourable base effect will likely dissipate after Nov
* Dec inflation may well rise above current levels
* Uncertainty about evolution of base effect in inflation

MARKET

Call  : Seen opening near repo rate. Liquidity conditions ample on govt salary

        and pension payments. 1-day call: 7.95-8.10% vs 4.00% 2-day Sat.

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Bonds : To track oil prices. Participants may be cautious ahead of RBI policy

        Tue. 10-year bond yield 8.07-8.12% vs 8.08% Friday.

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Rupee : May open a tad up on better-than-expected GDP. Seen in thin band ahead

        of RBI policy. Range: 61.85-62.10/$1 vs 62.03 Friday.

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Stocks: Indices may fall on profit booking. RBI policy eyed

        Nifty range: 8380-8750, Friday-end: 8588.25, up 94.05 points.

DATA ALERT

> JAPAN MANUFACTURING PMI for Nov. 0705 IST

  > JAPAN AUTO SALES for Nov. 1030 IST

  > FRANCE MANUFACTURING PMI for Nov. 1420 IST

  > GERMANY MANUFACTURING PMI for Nov. 1425 IST

  > EUROZONE MANUFACTURING PMI for Nov. 1430 IST

  > UK MONETARY AND FINANCIAL STATISTICS for Oct. 1500 IST

  > UK CIPS/MARKIT MANUFACTURING PMI for Nov. 1500 IST

  > BANK OF ENGLAND SYSTEMIC RISK survey results for H2. 1500 IST

  > US MANUFACTURING PMI FOR NOV. 2015 IST

  > US ISM MFG REPORT ON BUSINESS MANUFACTURING PMI for Nov. 2030 IST

  > US GLOBAL MANUFACTURING PMI for Nov. 2130 IST

UPDATE ON RBI COUNTER

 

GOVT BEAT

* Minister for Road Transport, Highways & Shipping Gadkari to hold a review meeting on the status of progress of Mumbai-Goa Expressway project and the project under implementation in Maharashtra. 1430 IST, New Delhi.

* Press briefing on the highlights of CAG's audit reports scheduled to be tabled today. 1530 IST, New Delhi.

RBI COUNTER

* DAILY LAF TENDERS: One set of 3-day reverse repo (at 7.00%) and 3-day repo (at 8.00%). Bids for repo tender may be submitted between 0930 IST and 1030 IST, and reverse repo between 1900 IST and 1930 IST.

* GILT AUCTIONS: RBI to auction 30 bln rupees of 8.27%, 2020 bond, 60 bln rupees of 8.40%, 2024 bond, 20 bln rupees of 9.20%, 2030, and 30 bln rupees  of new 30-year bond.

* TERM REPO: One set of 14-day variable rate term repo for 180 bln rupees. Bids may be submitted between 1100 and 1130 IST.

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Repo Bids For Tender

RBI COUNTER

* DAILY LAF TENDERS: One set of 1-day reverse repo (at 7.00%) and 1-day repo (at 8.00%). Bids for repo tender may be submitted between 0930 IST and 1030 IST, and reverse repo between 1900 IST and 1930 IST.

* Minister of State of Culture & Tourism and Civil Aviation Sharma and Commerce Secretary Kher to be present at award presentation ceremony of India International Trade Fair. 1300 IST, New Delhi.

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RBI COUNTER

RBI COUNTER

* DAILY LAF TENDERS: One set of 1-day reverse repo (at 7.00%) and 1-day repo (at 8.00%). Bids for repo tender may be submitted between 0930 IST and 1030 IST, and reverse repo between 1900 IST and 1930 IST.

* T-BILL AUCTION: RBI to hold auctions of 80 bln rupees of 91-day T-bills, and 60 bln rupees of 364-day T-bills.

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