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Rupee, Local Equities Gain as Middle East Tensions Fade

INDIA
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  • Like the majority of its Asian peers, the Indian rupee has firmed against the dollar at the start of the week amid a fade in the greenback on the back of easing geopolitical tensions. USDINR closed the session 0.12% lower, extending the pullback from Friday’s fresh cycle high to around 0.25%. Lower oil prices may be providing an additional tailwind to the rupee, though a break of the 50-day EMA, at 83.1881, would be needed to signal a bearish shift in USDINR.
  • Positive sentiment is also being reflected in the local equity markets, with the Nifty index gaining as much as 1% on the day. Yields on Indian bonds sit 1-5bps lower across the curve – 10y yields have fallen back below the 7.2% level after reaching multi-month highs last week.
  • India’s April manufacturing PMI is due tomorrow morning and is the only local release of note this week. A slight pullback from the current level of 59.1 is expected after three months of gains, but ING say this doesn’t merit any concern and should still be consistent with strong growth.
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  • Like the majority of its Asian peers, the Indian rupee has firmed against the dollar at the start of the week amid a fade in the greenback on the back of easing geopolitical tensions. USDINR closed the session 0.12% lower, extending the pullback from Friday’s fresh cycle high to around 0.25%. Lower oil prices may be providing an additional tailwind to the rupee, though a break of the 50-day EMA, at 83.1881, would be needed to signal a bearish shift in USDINR.
  • Positive sentiment is also being reflected in the local equity markets, with the Nifty index gaining as much as 1% on the day. Yields on Indian bonds sit 1-5bps lower across the curve – 10y yields have fallen back below the 7.2% level after reaching multi-month highs last week.
  • India’s April manufacturing PMI is due tomorrow morning and is the only local release of note this week. A slight pullback from the current level of 59.1 is expected after three months of gains, but ING say this doesn’t merit any concern and should still be consistent with strong growth.