Spot USD/INR remains closed onshore, as do domestic bond yields, but onshore equities are open, with sentiment tracking higher at this stage. The main bourses are up by around 0.75/0.80% at this stage. Stocks are only 1.5% off April highs. The positive spill over is evident for the INR in the NDF space. The 1 month USD/INR NDF is back sub 79.60, around 0.3% below yesterday's closing levels. This compares with the onshore spot close of 79.65 from the end of last week. Current NDF levels are implying a firmer rupee spot open tomorrow.
- Note, coming up shortly is Indian wholesale price data for July. The market expects a +13.7% print, versus +15.18% last month. Recall on Friday that July CPI printed a touch softer than expected at 6.71% versus 6.75% forecast and above 7% prior. Inflation trends remain key to the RBI outlook for the next 3-6 months.