Ksh*tij Consultancy Services

"Last year I drove from Kolkata to New Delhi. I tell you, Google Maps was such a great help!"
"This year we are planning a 15-day trek in the Himalayas. It is so helpful to look up the weather forecasts to prepare for the trip."
Everyone uses Google Maps today and laughing at weather forecasts is now an outdated joke.

https://www.linkedin.com/pulse/google-maps-currency-forecasts-vikram-murarka-lodkf/

Brent has risen sharply contrary to our expectation of seeing a fall from $90.
Will it sustain trade above $90?
Find detailed analysis in the October-23 report https://ksh*tij.com/crude-oil-payment-details/oct-23

GOLD DOUBTS LOWER INFLATION?
This is a telling chart of Gold ($1945, LHS, Reverse) and US 10Yr Real Yield (RHS, 0.40% in Aug-23, estimated at 0.82 in Sep-23).

Since 2006, generally a rising Real Yield is accompanied by falling Gold and falling Real Yield by rising Gold, except for the periods marked in the two broken red boxes. In these two times we see Gold rising despite a sharp increase in the Real Yields.

Detailed analysis is given in our October’23 issue of US Treasury Yields Report : https://ksh*tij.com/ustyields-forecast-payment-details/oct-23

News from the ECB on hinting at possible pause in rate hikes earlier in July and then in September along with a higher US NFP data in early Sep-23 has aided Euro to fall and remain below 1.08 contrary to our expectation of holding above 1.08.
In the current report we analyse factors that correlate well with Euro to take some cues for further movement from here. Tomorrow’s FOMC will be crucial. https://ksh*tij.com/eurusd-forecast-payment-details/sep-23

Hurry! Registration Ends on 17-Sep-23.

We see "DANGER AHEAD on many Charts" and shall be sharing these in a webinar on 18-Sep-23 at 6.00PM (IST) via ZOOM. This is an exclusive opportunity for CEOs, CFOs, treasurers, long-term hedgers, and investors keen to be forewarned of the dangers ahead across various markets (crude, interest rates, equities and forex) and therefore to prepare themselves adequately.

Who should attend?
• CEOs and decision-makers charting the course for their organisations
• CFOs managing financial strategies and risk
• Treasurers responsible for managing currency and financial market risks and liquidity
• Exporter and Importers hedging currency risk
• Long-term Investors committed to sustainable growth

Who is this NOT for?
This webinar is not aimed at those looking for short-term gains. Instead, it's curated for individuals who understand the value of playing the long game, capitalising on trends that unfold over time.

Priced at ₹1,100/- this is a PAID webinar for those who want to go beyond the noise. All proceeds will go towards the Scholarship Scheme of Chinmaya Vishwa Vidyapeeth (https://www.cvv.ac.in/scholarships) So, when you invest in your financial well being, you will also be investing in a deserving student’s education and future.

Register now: https://forms.gle/NkbbTf3JLR2gdth37

Join us on this journey to enhance your strategic thinking and equip you to face the challenges ahead. Together, we'll decipher the dangers hidden within the charts and transform them into opportunities for growth.

Let's navigate the future with clarity and confidence. See you there!

We see "DANGER AHEAD on many Charts" and shall be sharing these in a webinar on 18-Sep-23 at 6.00PM (IST) via ZOOM. This is an exclusive opportunity for CEOs, CFOs, treasurers, long-term hedgers, and investors keen to be forewarned of the dangers ahead across various markets (crude, interest rates, equities and forex) and therefore to prepare themselves adequately.

Who should attend?
• CEOs and decision-makers charting the course for their organisations
• CFOs managing financial strategies and risk
• Treasurers responsible for managing currency and financial market risks and liquidity
• Exporter and Importers hedging currency risk
• Long-term Investors committed to sustainable growth

Who is this NOT for?
This webinar is not aimed at those looking for short-term gains. Instead, it's curated for individuals who understand the value of playing the long game, capitalising on trends that unfold over time.

Priced at ₹1,100/- this is a PAID webinar for those who want to go beyond the noise. All proceeds will go towards the Scholarship Scheme of Chinmaya Vishwa Vidyapeeth ( https://www.cvv.ac.in/scholarships ). So, when you invest in your financial well being, you will also be investing in a deserving student’s education and future.

Register now: https://forms.gle/NkbbTf3JLR2gdth37

Join us on this journey to enhance your strategic thinking and equip you to face the challenges ahead. Together, we'll decipher the dangers hidden within the charts and transform them into opportunities for growth.

Let's navigate the future with clarity and confidence. See you there!

Euro fell sharply after the ECB hinted at a possible pause in its interest rate cycle in its next meeting in Sep-23 which was unexpected and unaccounted for given the high EU inflation rates.
• But will the fall stop in Euro at 1.08?
• Or will it continue to fall further into a medium term bear market?
Find our latest projection on Euro with 12-month numerical benchmarks in the August-23 report. https://ksh*tij.com/eurusd-forecast-payment-details/aug-23

Crude prices have moved up over the last couple of months from support at $70. Will it continue to move up? Market positioning and sentiment looks bullish just now but could it take crude prices significantly higher than current levels?
Economic data releases over the next few months would be important to watch along with the policy stance by FED and ECB in the next September meeting.
https://ksh*tij.com/crude-oil-payment-details/aug-23

UNEMPLOYMENT CAN RISE
The US Unemployment Rate is on the cusp of a rise. Whenever the Unemployment Y/Y% change has risen from sub-zero levels and moved higher Unemployment Rate has subsequently risen.

As the Unemployment Y/Y% now rises towards 10%+, the Unemployment Rate can soon start rising towards 4%, in line with the FOMC’s projection of 4.1% for 2023. However, the FOMC’s projections of 4.5% for 2024 and 2025 might be underestimates.

History tells us that once it starts rising, Unemployment can rise past 5% as well. It will be interesting to see if the FOMC will give greater weightage to increased chances of Unemployment rising past 5% in 2024 and so take on a wee bit of a dovish tone in its communications.
https://ksh*tij.com/ustyields-forecast-payment-details/aug-23

Euro has recovered well from low of 1.0634 in June-23 to current levels. Does that indicate that a low has been established for the next few months? Or could the Euro remain ranged within a broad range seen since the beginning of the year? Detailed analysis is given in the July-23 report. https://ksh*tij.com/eurusd-forecast-payment-details/july-23

We’d said that the Hourly Earnings Growth Rate (HEGR) may remain above 3.5%. The HEGR has remained between 4.30-4.35% for March-May. It might dip to 4.25%-4.11% in June-July, but still remain above 3.5%. https://ksh*tij.com/ustyields-forecast-payment-details/july-23

Crude prices have been ranged within the broad $70-90 zone since Dec-22 and has recently narrowed down to $80-70 over the last few weeks.
* Can the range continue through the rest of the year?
* Or could volatility seep in and bring in sharp movement from current consolidative range? https://ksh*tij.com/crude-oil-payment-details/july-23

Negative for for first quarter of 2023 has taken it to a recession technically. Inflation is expected to remain stable in the coming months while both the and the remain hawkish on their media statements.

• Within this can Euro bounce back to levels above 1.08 and move up?
• Or could it continue to trade below 1.08?

To buy a single copy or subscribe for a year please click: https://ksh*tij.com/eurusd-forecast-payment-details/june-23

Hit The Sweet Spot with our NEER calculation.
Measure it to Improve it!
https://colourofmoney.ksh*tij.com/hit-the-sweet-spot-with-our-neer-calculation/

Measure or calculate your Net Effective Exchange Rate The very first thing that an importer or exporter, have to do is to start tracking and measuring their Net Effective Exchange Rate, because measurement is the first step to improvement.

Brent has been ranged since Dec-22 within $90-70 region. OPEC production cut has been implemented this month and the impact can be assessed in the next OPEC meeting scheduled on 4th June 2023. Possibility of economic slowdown could weigh on the crude prices.
Other factors closely correlated to crude prices are discussed in the June23 report in detail To buy a single copy or subscribe for a year please click: https://ksh*tij.com/crude-oil-payment-details/june-23

WE ARE ECHOED BY MOHAMED EL-ERIAN
In our Apr-23 report (27-Mar-23, US10Yr @ 3.44%) we had said that (A) the FED’s 2% inflation target is an arbitrary number which was possibly based on the benign post-1980 world of economic co-operation and declining inflation and that (B) “it would seem difficult for CPI to keep coming down towards the Fed’s targets of 3.3% (2023), 2.5% (2024) and 2.1% (2025).”

It is good to see our view being echoed by marquee names like Mohamed A. El-Erian (please see his tweet of 22-May in the image below) and Gita Gopinath, First MD of IMF.

To buy a single copy or subscribe for a year please click: https://ksh*tij.com/ustyields-forecast-payment-details/june-23

EURINR has been holding below resistance near 90.60 and finding it difficult to break above 90.60.

Will the pair hold and decline eventually giving more weightage to the resistance near 90.60? Or can the sideways movement be considered as a temporary pause post which we may see a sharp break out on the upside?

For detailed report refer to the May23 edition of our monthly report. https://ksh*tij.com/eurusd-forecast-payment-details/may-23

The Net long short position ratio has risen strongly but has not reflected in a rise in crude prices so far.
* Will crude prices continue to remain lower while the net position is up?
* Or will sustained sideways consolidation bring down the long position in the market?
To buy a single copy or subscribe for a year please click: https://ksh*tij.com/crude-oil-payment-details/may-23

Since our last report (27-Mar-23, US 10Yr @ 3.38%) US Yields have moved up across the Curve despite the raising rates by only 25bp instead of the expected 50bp. In the report we had suggested that “the China-Russia-Saudi triad can, if they want, try to keep Crude prices high and thereby inflict a high inflation cost on the West”. Thereafter immediately on 02-Apr-23, OPEC+ cut production targets, sending Crude higher. Yields have risen since then, and the mentioned Support at 3.25% on the US10Yr has held so far. Can US10Yr dip to 3.0% before rise?
To buy a single copy or subscribe for a year please click: https://ksh*tij.com/ustyields-forecast-payment-details/may-23

Euro has managed to rise over the last 1-month from levels near 1.05.

Net Long/Short position in the market is still high and the long positions are likely to move up. With inflation data coming out lower for Mar-23, it would be important to see the forward guidance from the ECB in its next policy meeting on 4th May 2023.

For detailed analysis on Euro, check out our latest April-23 report To buy a single copy or subscribe for a year please click: https://ksh*tij.com/eurusd-forecast-payment-details/apr-23

The markets have been strongly short positioned with continued sharp fall in prices seen in March-23. It would be crucial to see if the positioning turn towards the long in the coming months or continues to remain at low levels The April-23 monthly crude report discusses the future path ahead in detail.
To buy a single copy or subscribe for a year please click: https://ksh*tij.com/crude-oil-payment-details/apr-23

The has raised rates by 25bp. From its statement and the press conference it seems that had it not been for the , it might have raised by 50bp also. if remains high, would the FED be able to resume additional hikes as needed..... https://ksh*tij.com/ustyields-forecast-payment-details/apr-23

After falling from 1.1033 in Feb-23, Euro has tested 1.0516 so far in Mar-23.
* Could Euro be ranged below 1.10 for some more time?
* Can it break below 1.05?
Find detailed analysis on the next course of movement for Euro projected in the Mar-23 report. To buy a single copy or subscribe for a year please click: https://ksh*tij.com/eurusd-forecast-payment-details/mar-23

Crude has been in a sideways consolidation but it would be important to know how long it would continue to remain ranged. Volatility is likely to remain low in Mar-23. Will Crude prices continue to consolidate below $90?
To buy a single copy or subscribe for a year please click: https://ksh*tij.com/crude-oil-payment-details/mar-23

In our last report (30-Jan-23, US 10Yr @ 3.53%), we had said that a recession (which was the talk of the market at that time), might kick-in earliest by Oct-23 and as such, the FED may not cut rates in 2023. We had also said that the US 2Yr could still rise towards 5.25%, while the US 10Yr could still rise towards 4.00%. Since then, the talk of recession has faded away and instead the talk is about the persistence of inflation, given the dip in Unemployment to 3.4%, the release of the FOMC Minutes which talks about “higher for longer” and a 50bp hike, and an uptick in the PCE Core Price index. As expected, yields have moved up, about 60bp at the near-end and 40-30bp at the far-end.

Will US 2Yr yield stop at 5.25%? *tijfx

To buy a single copy or subscribe for a year please click: https://ksh*tij.com/ustyields-forecast-payment-details/mar-23

Comparing various currencies, and commodities with Rupee since Oct-22
- All the currencies have appreciated against Dollar since Oct-22.
- Gold has appreciated and Crude has fallen.
- Then WHY is it that only the Rupee is trading weaker against the Dollar?

The only answer seems to be RBI intervention to weaken the Rupee and rebuild the FX Reserves.

Contrary to how we feel about it, a stable market is much more dangerous than a volatile, moving market because

(A) volatility is the nature of the market, stability is an unnatural state
(B) stability lulls the risk manager into a state of complacency and stupor
(C) it becomes near impossible to figure out the direction in which the inevitable break of the range will come, making it extremely difficult to hedge for the eventuality.

If you want our FREE Long-term Dollar-Rupee Report and 15-days trial of our Daily Rupee Update service please click here: https://bit.ly/3xQRycG

*tijfx

Euro faced rejection from 1.1033 and has fallen sharply this month. We keep our last month projections intact for the coming months but near-term volatility could be intact. The ECB have raised rates by 50bps in Feb-23 and expect to raise by another 50bps in its Mar-23 policy meeting. We need to keep a close watch to see if inflation figures continue to fall which could pave the way for the central banks to consider termination of rate hikes soon.

To buy a single copy or subscribe for a year please click: https://ksh*tij.com/eurusd-forecast-payment-details/feb-23

looks stuck within a specific range and needs to give directional clarity on a break on either side of the range. Till then we might have to take cues for near term movement from other commodity-metals, energy-commodities and from fundamental economic scenario. The proposed price cap by the EU on Russian Petroleum products and its impact would be crucial to watch this week. Overall if all factors together can keep Brent ranged or push it towards a specific direction will drive the next course of movement for the oil.
To buy a single copy or subscribe for a year please click: https://ksh*tij.com/crude-oil-payment-details/feb-23

Since our last report (27-Dec-22, US 10Yr @ 3.75%) the Core PCE (4.42%, Dec-22) has dipped further. The entire Yield Curve has shifted lower by 14-26 bp since the last report. In particular, the US 10Yr dipped to 3.36% on 19-Jan, almost in line with our expectation of a fall towards 3.25%.
The Core PCE (4.42% in Dec-22), the Fed’s favourite inflation index, looks like it may have peaked and might come down towards 4.0% and lower in the coming months.
Aiding the fall would be the relatively low Crude prices and the dip in the Average Hourly Earnings data
To buy a single copy or subscribe for a year please click: https://ksh*tij.com/ustyields-forecast-payment-details/feb-23