Bill Sale Awaited For Demand Cues

Yields higher in early trade, markets look ahead to an INR 360bn bill sale later today.

• Data yesterday showed India's trade deficit narrowed more than expected in May, exports rose 69.4% while imports rose 73.6%. Imports took a bigger hit which was attributed to lower imports of gold.
• A note from Barclays is doing the rounds which suggests the RBI could shrink its forward dollar book in order to replace rupee liquidity lost due in an increase in the cash reserve ratio. This would also lower hedging costs which could lead to foreign inflows. The one-year forward premiums has declined to 4.76%, from a 4 1/2-year high reached in March.
• On the coronavirus front India reported 62,224 new COVID-19 cases in last 24 hours. Active cases further declined to 8,65,432 with 1,07,628 discharges in last 24 hours, recoveries continue to outnumber daily new cases for the 34th consecutive day.