INR's surge across Asian markets (firmly......>

INDIA: INR's surge across Asian markets (firmly outperforming all others in

EMFX) follows exit polls this weekend suggesting incumbent Modi will secure

another victory and hold office for another five years in parliament. Final

results aren't expected until Thursday, but current polling suggests Modi's

party will win as many as 350 seats (the house consists of 543 seats). Should

these polls play out on Thursday, Modi's command of parliament will be far

greater than expected, helping lead the INR higher today and the sovereign curve

significantly lower.

-Spot USD/INR opened below the 50-dma (69.5446), but has climbed back above

ahead of the close. Firm assumed foreign capital inflows into equities prompted

the best day for Indian stock markets of the year, with the NIFTY-50

re-approaching the year's (and alltime) highs of 11,856.

-USD/INR implied vol markets are offered across the curve, with the 1m measure

dropping well over 1.5 points to the lowest levels since late April (when the

contract began to capture the election results). Risk reversals appropriately

edged lower with spot, but the 1m RR still sits close to the year's best levels.