The Week gone by ended with CRR (Credit Reserve Ratio) cut of 75 BPS from RBI. It was a Surprise in term of Timings as we have credit policy on 15 March and quantum. Most Optimistic market participants accepted only 50 BPS, 75 BPS was quiet a surprise as it pumped 48,000 Cores in market.
Another Shock which came late in evening was ISDA (International Swaps and Derivatives Association, Inc.) saying Greek CDS (Credit Default Swap)Triggered By Use Of Collective-Action Clauses.
Let me explain CDS in layman term:
Suppose you bought a Car insurance that was supposed to pay out if you got into a car accident. If suppose you got into car accident than insurance has to repay for damages as per insurance policy and if suppose your car does not met any accident for the term of insurance insurance company will not pay out anything .
Triggering of CDS means Payout of a net $3.2 billion needs to be done to banks,institution who bought the CDS.
Will it trigger a panic in financial system
The net payout on Greek CDS will likely to be $3.2 billion, and most of that money has already been set aside by the companies who will have to make the payments, according to ISDA.
Also Financials system is flooded with 529 Billion Euros of LTRO money so this amount is a dwarf amount and it shall not create any panic in market.
Panic if any shall be bought into by short term traders.
Coming Week will an eventful week with lots of Economic Data on every day which will market very volatlile
12th Mar IIP
13th Mar US FOMC rate Dec.
14th Mar WPI and Railway Budget
15th Mar Credit Policy
16th Mar Budget.
Lets Jump into technical
Nifty Hourly Chart
On Hourly charts Nifty closed above...
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Rgds,
Bramesh
09985711341
http://www.brameshtechanalysis.com/
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