Informist, Tuesday, Oct 11, 2022
By Shubham Rana
NEW DELHI - Overnight indexed swap rates came off the day's highs, with the five-year swap ending down as banks received fixed rates today for a large corporate house, dealers said.
The large corporate house received fixed rates via banks in order to mitigate its interest rate risk on a bond issued recently, dealers said. Traders also persistently received fixed rates anticipating further flows, which offset an early rise in the five-year OIS rate, they said.
After rising to 7.27% in early trade, the one-year overnight indexed swap rate settled at 7.18% as against 7.19% on Monday. Meanwhile, the five-year swap rose to 7.15% during the day, but closed at 7.02% compared to 7.05% the previous day.
Swap rates rose in early trade tracking a rise in US Treasury yields, dealers said. The yield on the benchmark 10-year US Treasury note jumped 11 basis points to 4.00% in early trade, as investors braced for another high US inflation reading on Thursday.
As US Treasury yields came down from the day's highs, so did swap rates, and traders unwound their paid positions, dealers said.
Swap rates also came down noting a fall in crude oil prices during the day, dealers said. Brent crude for December delivery fell over 2% from Monday's settlement and was at $93.73 a bbl at the end of Indian trading hours.
Volumes were relatively muted as traders kept to the sidelines ahead of the India CPI data, due after market hours on Wednesday, dealers said.
India's retail inflation rate based on CPI is expected to rise to a five-month high of 7.3% in September, according to median of an Informist poll of 20 economists.
Traders will also keep an eye on the US CPI data, due on Thursday. Retail inflation in the US is expected to moderate marginally to 8.1% in September against 8.3% in August.
OUTLOOK
On Wednesday, swap rates may open steady due to lack of fresh triggers on interest rates, dealers said.
Rates may be volatile in the run-up to the CPI data.
Any movement in US Treasury yields and crude oil prices may lend cues at open.
The swap rate in the one-year segment is seen at 7.05-7.30%, and in the five-year segment at 6.90-7.15%.
| At 1530 IST | Monday |
1-year OIS | 7.18% | 7.19% |
2-year OIS | 7.07% | 7.09% |
5-year OIS | 7.02% | 7.05% |
2-year MIFOR | 6.97-7.09% | 6.95-7.07% |
5-year MIFOR | 7.07-7.19% | 7.05-7.17% |
End
US$1 = 82.31 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Vandana Hingorani
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Informist, Tuesday, Oct 11, 2022
By Shubham Rana
NEW DELHI - Overnight indexed swap rates came off the day's highs, with the five-year swap ending down as banks received fixed rates today for a large corporate house, dealers said.
The large corporate house received fixed rates via banks in order to mitigate its interest rate risk on a bond issued recently, dealers said. Traders also persistently received fixed rates anticipating further flows, which offset an early rise in the five-year OIS rate, they said.
After rising to 7.27% in early trade, the one-year overnight indexed swap rate settled at 7.18% as against 7.19% on Monday. Meanwhile, the five-year swap rose to 7.15% during the day, but closed at 7.02% compared to 7.05% the previous day.
Swap rates rose in early trade tracking a rise in US Treasury yields, dealers said. The yield on the benchmark 10-year US Treasury note jumped 11 basis points to 4.00% in early trade, as investors braced for another high US inflation reading on Thursday.
As US Treasury yields came down from the day's highs, so did swap rates, and traders unwound their paid positions, dealers said.
Swap rates also came down noting a fall in crude oil prices during the day, dealers said. Brent crude for December delivery fell over 2% from Monday's settlement and was at $93.73 a bbl at the end of Indian trading hours.
Volumes were relatively muted as traders kept to the sidelines ahead of the India CPI data, due after market hours on Wednesday, dealers said.
India's retail inflation rate based on CPI is expected to rise to a five-month high of 7.3% in September, according to median of an Informist poll of 20 economists.
Traders will also keep an eye on the US CPI data, due on Thursday. Retail inflation in the US is expected to moderate marginally to 8.1% in September against 8.3% in August.
OUTLOOK
On Wednesday, swap rates may open steady due to lack of fresh triggers on interest rates, dealers said.
Rates may be volatile in the run-up to the CPI data.
Any movement in US Treasury yields and crude oil prices may lend cues at open.
The swap rate in the one-year segment is seen at 7.05-7.30%, and in the five-year segment at 6.90-7.15%.
| At 1530 IST | Monday |
1-year OIS | 7.18% | 7.19% |
2-year OIS | 7.07% | 7.09% |
5-year OIS | 7.02% | 7.05% |
2-year MIFOR | 6.97-7.09% | 6.95-7.07% |
5-year MIFOR | 7.07-7.19% | 7.05-7.17% |
End
US$1 = 82.31 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Vandana Hingorani
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2022. All rights reserved.
