Crazy Month End – Big Candles, Malaysia Downgrade, And This Indian Oil Business

This shows how on the edge the market is.

Did anyone see that big candle in Gold this morning ?


No explanation offered yet except that a german bank bought a chunk.

USDSGD and a big candle up after the unemployment rate rose to 2.1% (vs expected 1.9%) and bank loan growth showed signs of slowing down, just growing 17.7% (vs previous 18.8%). Target 1.28 into next week, I say.


July 31 (Bloomberg) — Malaysian stocks fell the most in
almost seven weeks, the ringgit slumped and bonds extended
losses after Fitch Ratings cut the nation’s credit outlook,
citing rising debt levels and a lack of budgetary reform.

Negative + negative cancels, so SGDMYR not seeing much of a spike and stabilising around 2.55 but it looks like nowhere near a top.

sgdmyr fx chart

Bond Market

Peripheral and frontier bonds getting hit. Ghana and Nigeria now paving the way for Ivory Coast and Senegal to issue next.

Indian names getting hit today too. Newly issued Indian Oil in USD widened back out and is trading at cash price of 99.00 mid. Strangely, SGD corporate bonds for the Indian names are looking higher today.

I decided to try and value the SGD Indian Oil 4.1% 10/ 2022 vs the new issue USD Indian Oil Corp 5.75% 08/2023 and work out where a fair level would be. Quite horrified by the results.

Indian Oil USD is trading at about 5.85% now which translates to roughly 5.5% for the SGD paper and a cash price of 90.00.

The market price, however, is 95/95.50.

Quite a steep drop.