FICC TIMES http://www.rsquareadvisors.com/index. html http://www.rsquareadvisors.com/index.

html
THE WEEK GONE BY AND THE WEEK AHEAD .

26 July, 2013

A slew of positive data came out of the US with new home sales rising to a five year high at 8.3% (in-spite of the recent spike in mortgage rates), durable goods order at 4.2% (way above expectation of 1.5%) and the UMich consumer sentiment index at its six year high that lead Dow to a 5th consecutive positive week. The USD depreciated against the Euro by 1.04% and against the yen by 2.35% due to higher US yields and lower expectation of immediate QE tapering by the federal reserve. The USD depreciated against the rupee by 1.47% for the week ending July 26th. Some major steps taken by the RBI that squeezes the liquidity from the banking system has supported the rupee through the week and helped it bounce back. 28 Dec 2012

The key events of last week:

The U.S. economy improved slightly in June, as the national activity index rose to negative 0.13 from negative 0.29 in May, according to the Chicago Fed.

Sales fell 1% to an annual rate of 5.08 million, from a downwardly revised 5.14 million in May, the National Association of Realtors said. National chain store sales edged up 0.9% in the first two weeks of July from June, according to Redbook Research's latest indicator, released Tuesday. U.S. house prices rose 7.3 percent in the year through May as buyers competed for a small supply of listings, according to the Federal Housing Finance Agency. Applications for U.S. home mortgages fell 2.6% last week, driven by a decline in demand for refinancing loans as mortgage interest rates remained at a two-year high, data from an industry group on Wednesday. US new home sales shot up to a five-year high in June amid depleting inventories of existing 108, Madhava, Bandra Family Court Lane, BKC, Bandra (E), Mumbai 51 Page 1

THE WEEK GONE BY AND THE WEEK AHEAD.

properties on the market. New jobless claims jump to 7,000 during the last week, but still improving slowly. The measure has continued to slowly inch downward, further into pre-recession territory. Consumer confidence rose last week as an improving job market helped make Americans the least pessimistic about the economy in more than five years. The Fed's balance sheet liabilities, which are a broad gauge of its lending to the financial system, stood at $3.532 trillion on July 24, compared with $3.495 trillion on July 17.

And closer home.

India removes trading band for govt bonds for Friday - FIMMDA The Reserve Bank of India's measures to cut liquidity in the money market means that 6% growth forecast for gross domestic product (GDP) looks unachievable. Forward premia for dollars across maturities extended losses for the second straight session on softer trend in spot market amid exporters selling following Reserve Bank of India's measures aimed at strengthening the local currency, dealers said. Dollar/rupee posted its longest losing streak Friday on exporters selling after a series of measures by the Reserve Bank of India to support the local currency amid weakness in the greenback against other currencies, dealers said. However, the fall in the greenback was cushioned by robust importers demand. Dollar/rupee is expected to fall next week on likely increase in inflows amid month-end demand for the greenback from importers and expected further likely tightening by the RBI, dealers said. India's foreign exchange reserves including gold and Special Drawing Rights were up by $ 0.021 billion to $280.188 billion in week to Jun 12, Reserve Bank of India's Weekly Statistical Supplement showed Friday.

Important upcoming International events to be tracked:

Date 29-07-2013 30-07-2013 30-07-2013 30-07-2013 30-07-2013 31-07-2013 Time 19:30 IST 14:30 IST 17:15 IST 18:25 IST 19:30 IST 14:30 IST Country US European Monetary Union US US US European Monetary Union Event Pending Home Sales Index EC Economic Sentiment ICSC-Goldman Store Sales Redbook Consumer Confidence Unemployment Rate

Page 2

THE WEEK GONE BY AND THE WEEK AHEAD.

31-07-2013 31-07-2013 31-07-2013 31-07-2013 31-07-2013 1/8/2013 1/8/2013 1/8/2013 1/8/2013 1/8/2013 1/8/2013 1/8/2013 1/8/2013 2/8/2013 2/8/2013 2/8/2013 16:30 IST 18:00 IST 19:15 IST 20:00 IST 23:30 IST 00:30 IST 13:30 IST 17:00 IST 17:15 IST 18:00 IST 19:15 IST 19:30 IST 20:00 IST 02:00 IST 02:00 IST 18:00 IST US US US US US US European Monetary Union US European Monetary Union US US US US US US US MBA Purchase Applications GDP Chicago PMI (Business Barometer Index - Level) EIA Petroleum Status Report FOMC Meeting Farm Prices PMI Manufacturing Index Challenger Job-Cut Report (Announced Layoffs Level) ECB Announcement Jobless Claims Bloomberg Consumer Comfort Index Construction Spending EIA Natural Gas Report Money Supply Fed Balance Sheet Employment Situation

Important upcoming Domestic Events:

Date 29-07-2013 30-07-2013 31-07-2013 31-07-2013 31-07-2013 1/8/2013 1/8/2013 2/8/2013 2/8/2013 10:30 IST 17:00 IST 17:00 IST 11:00 IST 11:00 IST Time Country India India India India India India India India India Event IIP Core (YoY Chg) First Quarter Review of Monetary Policy 91 day T- Bills auction of Rs 70 bln (cut-off yld) Reserve Money (change on year) Government finances -fiscal deficit (pct of Budget Estimate) Power generation HSBC India manufacturing PMI WMA (ways and means advance) - to central govt FX reserve (change on wk)

TECHNICAL VIEW
After opening up around 59.72, rupee strengthened about 1.5% during the last week and finally closed around 59.04 Both short term (Hourly) and medium term (daily) indicators have continued to stay bearish for the second consecutive week for USDINR, which in turn indicates rupee strength to persist going forward. Page 3

THE WEEK GONE BY AND THE WEEK AHEAD.

We perceive USDINR have reached a plateau after touching the all time high of 61.2. We expect rupee to trade in the range band of 58.5 to 60 in the next week. Next support level for rupee would be 57.5

Source : Ticker plant

Disclaimer: This document is copyrighted by R-Square and is intended solely for the use of the R-Square client, individual, or entity to which
it is addressed. This document may not be reproduced in any manner or re-distributed by any means to any person outside of the recipient's organization without the express consent of R-Square. By accepting this document you agree to be bound by the foregoing limitations. This is not an offer to buy or sell or the solicitation of an offer to buy or sell any security/instrument or to participate in any particular trading strategy. R-Square may advise the issuers mentioned herein or deal as a principal in or own or act as a market maker for securities/instruments mentioned herein. The research and other information provided herein speaks only as of its date. We have not undertaken, and will not undertake any duty to update the research or information or otherwise advise you of changes in the research or information. This email message and any attachments are being sent by R-Square and may be confidential. If you are not the intended recipient, please notify the sender immediately by email and delete all copies of this message and any attachments.

R-Square Advisors LLP

108, Madhava, Bandra-Kurla Complex, Bandra (E), Mumbai 400051 Tel: +91 22 6111 9494
Email: info@rsquareadvisors.com Website: www.rsquareadvisors.com

Page 4