Deciphering Markets Session

Trading
• Fixed Income
• Currency
• Commodities

Sales
• Corporate Sales
• Institutional Sales

Structuring
• OTC Products
• On demand or Self developed

Quants
• Algo Trading Models
• Backend Trading support function
Companies Hiring

*No guarantees :P
Internship Experience feat. Divyansh Khare
Duration: 8 weeks || 1st week: Orientation || 8th week: Leadership Project || 6 weeks, 3 equal Rotations

Rotation 1: EM LCT Desk Rotation 2: Credit Trading/GCSS Rotation 3: Equities Trading

Project: Nowcasting RBI’s Real Project: Backtesting trading Project: Backtesting correlation
Effective Exchange Rate Model strategies for High Yield and between daily volume and alpha of
on a Live Bloomberg enabled Investment Grade Bond Indices and Index Rebalancing trade and
Excel Dashboard duration hedging with US Treasuries building a related trading strategy
Internship Experience feat. Siddhartha Gangal
Company: Barclays Mumbai
Desk Offered: Sales
Team Structure: 3 people across desks
Products Covered:
• FX- Spots, Forwards and Options
• Rates: IGB, OIS, Mifor, CCS
• Credit: Bonds, Repo
Projects Undertaken:
• Correlation trend among macro-variables
• Data analysis of trade data
• Minutes of trade calls and weekly huddle
calls
• Commentary on bond market
• Trade Ideas
• Credit Notes
• Distressed Investment
• Pricing sheet for CCS
• Hit-Miss list
What Companies look for?

Clarity of Networking Quant

thought & Effort Skills

Multifactor Risk
Analysis Appetite
Important Economics Concepts
• Unemployment Rate, PMI, NFP • Supply shocks, demand shocks
• Carry trade
• WPI, CPI, stagflation, hyperinflation
• Easing/tightening using policy rate,
• Budget Deficit, Primary deficit QE
• Central Bank Mandates
• GDP, GNP, NDP, NNP, current/capital account • Inflation targeting, forward guidance
• Real vs nominal variables • Sacrifice ratio
• Exchange rate – nominal, real
• Purchasing power parity • Flexible, fixed, managed floating
• Quantity theory of money, Phillips curve, Okun’s • Trade policy
law • Impossible trinity
• Forward rates
• Fiscal Policy, Monetary Policy • Options futures and derivatives – to
• Term structure of interest rates be covered later
• Money – CRR, SLR
• Bonds – coupon bond, YTM, yield curve, IRR, • OMO
durations • Repo, reverse repo, bank rate etc
• FDI & FPI • Interest rate parity
Currencies
What is the spot exchange rate?
What is the forward exchange rate?
What factors affect foreign exchange rates?
What is the difference between a “strong” and a “weak” currency?
What are some ways the market exchange rate between two country’s currencies determined?
If the U.S. dollar weakens, should interest rates generally rise, fall, or stay the same?
If inflation rates in The United States fall relative to Great Britain, what happens to the exchange rate?
What is the difference between currency devaluation and currency depreciation?
If the spot exchange rate of dollars to pounds is $1.60/£1 and the one-year forward rate is $1.50/£1, would we
say the dollar is forecast to be strong or weak relative to the pound?
What is interest rate parity?
What is a carry trade?
Important Economics Concepts
Common Terminology
Long Position Short Position Rally

• Sell/Ask • Buy orders > Sell orders

• Buy/Bid
• Price expected to fall • Price increase
• Price expected to rise
• Bear • Bull’s Paradise
• Bull
• Positive info.

Bid-Ask Spread Sell-off

Ask Rate less Bid Rate

• Reward for Market Maker • Sell orders > buy orders
• Efficient Markets - > Lower Spread • Price decrease
• Liquidity -> Lower Spread • Bear’s Paradise
• Large cap vs small cap • Negative info.
• Impact of rally & sell-off
Types of Markets- Exchange vs OTC
Exchange OTC (Over the Counter)

Standardised Products Customised Products

Vanilla
Low Default Risk High Default Risk vs
Exotic
Involvement of Clearing House Through dealer or directly Products

Listing requirements Unlisted products

Ex – Futures, Options Ex – Interest Rate Swaps

Technical Indicators

Trend Momentum Volatility Volume

Moving Averages Stochastic Bollinger Bands Chaikin Oscillator

MACD Oscillator ATR On balance Volume
Parabolic SAR RSI Standard Deviation Volume Rate of Change
Support Resistance Channel
Bollinger Bands & RSI
Are you a Fixed Income Wizard?

If Jerome Powell(Fed Chair) was widely expected to start raising rates in Q3 2022 but in
the next FOMC meeting he shifts clearly states rates are not expected to rise till atleast
2025, what will happen to the 2 vs 5 Treasury bond spread?
a) Widens
b) Narrows
c) Remains same
d) I am not a Wizard
Are you a Fixed Income Wizard?

If China suddenly decided that they do not like Naruto and hence they nuke Japan,
what will happen to 2 year vs 10 year Treasury Bond spread?

a) Bull steepener
b) Bear flattener
c) Bull flattener
d) Bear steepener
Resources
• CMIE website • Investopedia – refer for basic concepts – use it to read
related topics
• Public Policy Club newsletter
• RBI website
• Economics Club newsletter
• Major global data points
• Finance club newsletter- FinePrint
• Compendiums from IIM C, A & B
• CMIE - create account from library
• Wallstreetoasis.com interview prep guide
• You will receive an email from CMIE everyday
• Go through the email • Puzzles, math
• Can also use the website
• Mint
• BB – prep material
• FxStreet
• Trends of USDINR, EURUSD, Brent, Spot Gold
• tradingview.com
• Fixed income trends
• Use Bloomberg terminal
• NIFTY SENSEX
• WSJ, FT – access available
Thank You!