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The 100-dma clearly continues to anchor.......>

INDIA: The 100-dma clearly continues to anchor USD/INR, with the pair closing
the session just above the mark at 70.2161 and pretty much flat on the day. Both
the INR and Indian equities held their ground for much of the session before
giving way in the final few hours to finish lower. Some wires cited nerves
surrounding the upcoming Indian election results, but Indian assets have been
far more closely tied with global risk sentiment and oil prices in recent weeks.
The contrast between global and domestic fund flows remains apparent this week
in the NSE data, with global funds once again net sellers of Indian equities
Wednesday while domestic funds were buyers.
-Trade balance data from April are unlikely to soothe the RBI's concerns, with
export growth dropping (to 0.6% from 11.0%) sharply while imports grew (to 4.5%
from 1.4%).
-Implied INR vols sit (slightly) lower but holds much of the recent gains with
the 1m contract capturing China-US trade risk as well as the general election
results on May 23rd. Market expectations remain for Modi to extend his term into
another parliament, albeit with a smaller vote share.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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