Futures Indicate A Lower Open

Forwards indicate the rupee is expected to open lower despite prevailing USD weakness, after jumping post RBI last week 1-month forwards have continued to climb, last at 75.72 from around 75.10 on April 12 (cash markets have been closed for two days with a local holiday). Some are saying that the decline is due to the RBI's announcement of bond purchases, despite the limited effect on Indian bonds, while others note the inflation differential between the US and India with both prints coming in the past week. The US printed 2.6% Y/Y CPI, while India saw prices rise 5.52%.

• There are still concerns over the potential for further lockdowns as the number of coronavirus cases surges, Maharashtra has already tightened restrictions through to the end of April, while markets will be playing catch up after a two-day holiday. As a further reminder data late on Monday saw CPI above expectations at 5.52% (est. 5.4%, prev. 5.03%), while industrial production missed at -3.96% (est. -3.0%, prev. -1.6%). On the economic docket today is WPI and the March trade balance.