FRIDAY: Late Morning Trading Strategies _ Stocks, Commodities, Currencies and bonds (sometimes)

 

As GSAM and a few others will willingly admit over the air, there is no return on your investment in China for a few more months. Of course the most important news of this market and it is affecting pre open rates as we speak is the Central bank liquidity thrust which has started in earnest even before the last obstacles toa Spanish bailout have been removed from ESM approvals to Spain’s own assessment and formal request. Bond buying in the 1-3 yr range by the ECB was announced
Bharat Heavy Electricals Limited

Bharat Heavy Electricals Limited (Photo credit: Wikipedia)

at the monthly ECB meeting yesterday and was good news fo those already picking up 7% and 5.5% bargains in Spanish and Italian bonds. The resulting liquidity esp as China is crushed under its own policy weight of the last twenty years is more investments in India.

 

However sooner or later more backing will be required for this rally as the BHEL and SAIL disinvestments look ticklishly unlikely despite Chidu’s best face on it. Bank nifty should be an important gainer if not today, tomorrow as 9850 was an important point of support.

 

Fixed Income Bonds are again out of supply as a small RBI auction threatens to drive up yields and advance tax withdrawals are expected to stress the system in two weeks if there are no OMOs scheduled. 8.2% yields are worrying esp as banks cut deposit rates, apparently the INR10Tln SBI doing it to maintain its 3.5% NIMs

 

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