USD/INR heads into the close at the best......>

INDIA: USD/INR heads into the close at the best levels of the session, rising

back above the 69.00 handle but still well shy of the week's best levels at

69.3750. The moves follow the RBI rate decision, where the bank cut rates by

25bps (alongside expectations) and laid the groundwork for further easing in the

coming months in response to lacklustre inflationary pressures. Nonetheless, the

bank kept their 'neutral stance' in a 5-1 vote, disappointing some who'd seen

recent open market operations (USD swap auctions) as a sign that the bank could

take a more activist role. This was reflected in Indian sovereign bonds, with

yields higher across thje curve. It may be the case that general elections due

to begin this month prevented such a move for now.

-Indian equities retreated further from alltime highs, with the Nifty 50 lower

by 1.5% in just two sessions. Attention turns to net fund flow figures into/out

of Indian assets, particularly if recent inflows pause ahead of elections.

-USD/INR calls have been popular following the decision, with markets eyeing

69.15 and 69.60 call strikes, although the short-end of the USD/INR risk

reversals curve has barely budged.