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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
INR
USD/INR is edging back up towards a fresh test of the 80.00 level. The pair was last at 79.85. The 1 month NDF is already above this level, last 80.07, but this is still below highs from August (80.35/45). INR outperformance continues on a cross basis though. The J.P. Morgan INR NEER is back to highs from late 2020, see the chart below.
- Indian equity outperformance is helping. Local equities are down today but only modestly (-0.25%) and are trending better compared to the rest of the region.
- This is improving the net equity flow backdrop, leaving India comfortably the best performer in the region (+$641.2mn so far this month).
- A Reuters article earlier also noted the central bank won't hike rates too aggressive for fear of hurting the growth backdrop too much.
- Such rhetoric can weigh on INR, particularly given the current Fed backdrop, but given the authorities desire to manage the pace of depreciation, rupee outperformance may persist.
- Also note, CNH/INR has broken down to fresh YTD lows (last at 11.32).
Fig 1: J.P. Morgan INR NEER At Fresh Multi-Year Highs
Source: J.P. Morgan/MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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