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.