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

html
THE WEEK GONE BY AND THE WEEK AHEAD .

May 17, 2013

The week started on a volatile note with the key Indian Indices recording sharp dips on Monday perhaps mostly due to profit booking by traders after a good previous week. However the markets recovered well by Wednesday over hopes that RBI may cut key rate in the upcoming policy review in June closing the week well over the psychological 20,000 mark for the BSE Sensex. Rate sensitive sectors like banking, real estate, auto, etc were the best performers. There were positive news on the inflation front for India as well with April WPI number coming in at 4.89% against 5.96% in March and CPI came in at 9.39% for April as against 10.39% in march. On the flip side, Indias trade deficit swells to USD17.8Bn for the month of April due to the surge in imports cheaper gold putting the spotlight back on the CAD numbers. S&P 500, Dow & Nikkei continue to hit all-time highs. Japan Q1 GDP increased by 3.5% vs the expectation of 2.7% and domestic product prices have remained stable (Abenomics is working!). The euro zone is experience its longest recession ever with the economic activity falling across the region for the sixth quarter in a row. US long-term treasury bond prices fell and yields rose amongst reports that the Federal Reserve is preparing a strategy to wind down asset purchases.

The key events of last week:

U.S. Commerce Department says retail sales crept up 0.1% during the month of April, after a 0.5% fall in March, which had been the largest in nine months.
U.S. industrial production fell by more than expected in April, reflecting a broad decline in factory output and a weather-related decrease in demand for utilities. National chain store sales edged up 0.7% in the first week of May from April, according to Redbook Research's latest indicator, released Tuesday. GDP fell by 0.2% in the euro area1 (EA17) and by 0.1% in the EU271 during the first quarter of 2013, compared with the previous quarter, according to flash estimates2 published by Eurostat, the statistical office of the European Union. In the fourth quarter of 2012, growth rates were -0.6% and -0.5% respectively.

28 Dec 2012

108, Madhava, Bandra Family Court Lane, BKC, Bandra (E), Mumbai 51

Page 1

THE WEEK GONE BY AND THE WEEK AHEAD.

The May 2013 Empire State Manufacturing Survey indicates that conditions for New York manufacturers declined marginally. The general business conditions index fell four points to -1.4, its first negative reading since January. The Producer Price Index for finished goods decreased 0.7 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods fell 0.6 percent in March and increased 0.7 percent in February.

More Americans than projected filed claims for jobless benefits last week and manufacturing in the Philadelphia region unexpectedly shrank in May, signs the slowdown in growth is rippling through the U.S. economy. U.S. builders broke ground on far fewer homes in April, one month after topping the 1 million mark for the first time since 2008. But applications for new construction rose to a five-year peak, evidence that the housing revival will be sustained.

Euro area1 annual inflation was 1.2% in April 20132, down from 1.7% in March. A year earlier the rate was 2.6%. Monthly inflation was -0.1% in April 2013. European Union3 annual inflation was 1.4% in April 2013, down from 1.9% in March. A year earlier the rate was 2.7%. Monthly inflation was 0.0% in April 2013. The U.S. Federal Reserve's balance sheet grew in the latest week as the central bank's holdings of U.S. Treasuries increased, Fed data released on Thursday showed.

Page 2

THE WEEK GONE BY AND THE WEEK AHEAD.

And closer home.

India's annual consumer price inflation slowed for the second straight month in April to 9.39 percent, government data showed on Monday.

Inflation eased to a 41 month-low of 4.89% in April coming at the back of falling prices of food products, including fruits and vegetables. The declining inflation has raised hope for further cut in interest rates by the RBI when it meets for its mid-quarter policy review on June 17. For March, the OECDs composite leading indicators signs of a turning point in economic activity point to a pickup in economic growth in most major economies. Even the troubled euro zone is gaining momentum. In India, however, growth is below trend. Dollar/rupee were little changed after global rating agency Standard and Poor's affirmed India's credit 'BBB-' long-term and also revised the outlook to negative from stable, dealers said.
SPOT Last Open High Low Prev 54.8425-54.8525 54.8500-54.8600 55.0000-55.0100 54.8300-54.8400 54.7750-54.7850 1-YEAR FWD PREMIUM 6.18-6.23% 6.18-6.23% 6.24-6.29% 6.16-6.21% 6.20-6.25% 1-MONTH FUTURES 54.9400-54.9425 54.9200-54.9225 55.1100-55.1125 54.9200-54.9225 54.8975-54.9000

Premia on forward dollar moved in a tight range Friday as investors remain cautious ahead of Reserve Bank of India's monetary policy review next month, dealers said.

Important upcoming International events to be tracked:

21-05-2013 21-05-2013 21-05-2013 22-05-2013 22-05-2013 05:30 IST 17:15 IST 18:25 IST 05:20 IST 16:30 IST Japan US US Japan US Bank of Japan Announcement ICSC-Goldman Store Sales Redbook Merchandise Trade MBA Purchase Applications

Page 3

THE WEEK GONE BY AND THE WEEK AHEAD.

22-05-2013 22-05-2013 23-05-2013 23-05-2013 23-05-2013 23-05-2013 23-05-2013 24-05-2013 24-05-2013

19:30 IST 20:00 IST 18:00 IST 18:30 IST 19:15 IST 19:30 IST 20:00 IST 02:00 IST 02:00 IST

US US US US US US US US US

Existing Home Sales (Existing Home Sales - Level SAAR) EIA Petroleum Status Report Jobless Claims FHFA House Price Index Bloomberg Consumer Comfort Index (Level) New Home Sales (New Home Sales - Level - SAAR) EIA Natural Gas Report Money Supply Fed Balance Sheet

Important upcoming Domestic Events:

20-05-2013 22-05-2013 22-05-2013 24-05-2013 24-05-2013 17:00 IST 17:00 IST India India India India India CPI - Agricultural Labourers(YoY Chg) Output of Natural gas,crude oil 182 days T- Bills auction of Rs 50 bln (cut-off yld) WMA (ways and means advance) - to central govt FX reserve (change on wk)

TECHNICAL VIEW
USD/INR looks to be range bound during last week with slightly upward bias. It opened at 54.5 levels and closed around 54.86 levels. Major long term technical indicators point Rupee weakness while short term indicators contradict and show some bullishness. We expect Rupee to hover in the range of 54.2 to 54.9 and may slightly appreciate as short term technical supports the same.

Page 4

THE WEEK GONE BY AND THE WEEK AHEAD.

r t

Tickerplant: USD/INR Daily Technical

Page 5

THE WEEK GONE BY AND THE WEEK AHEAD.

Disclaim:
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 6