USD/INR finished the session having touched...>

INDIA: USD/INR finished the session having touched the lowest levels since

mid-August at 71.0900. INR outperformed broader EMFX space, rising against

almost all other Asia-Pac FX, with most wires citing optimism surrounding

Trump's decision to delay the next phase of trade tariffs against Chinese goods

headed to the US, however oil prices likely played a stronger role, with Brent

crude futures dropping close to 7% from Monday's highs.

-Forward outright contracts show the INR firming further in offshore markets,

likely pointing to USD/INR resuming trade Friday under additional pressure. A

decent market response to the ECB rate decision likely helping re-incentivise

carry, which continues to benefit EMFX across the board (similar moves seen in

ZAR, TRY etc).

-CPI data for August came in modestly below expectations (3.21% vs. Exp. 3.32%)

and industrial production was healthy, giving the RBI enough justification to

trim policy and accelerate domestic growth in the coming months. The coming RBI

decision on October 4th now takes focus, with a high number of analysts now

seeing a cumulative 50bps of rate cuts by year's end.