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

INDIA
INDIA: USD/INR heads into the close at the best levels since Apr9, with markets
eyeing the first phases of the election process, monsoon rainfall reports and
trade balance data out yesterday. While INR fell, Indian equities didn't with
the NIFTY index breaching record highs once more Tuesday. Capital flow data
remains supportive, with NSE figures overnight showing both domestic and foreign
funds were net buyers of Indian stocks Tuesday.
-Citi's India election note released late yesterday suggested selling USD/INR on
rallies above 70.00, targeting 67.50 with a stop loss at 70.50. In options
space, Citi prefer longer-dated vols, with curves "massively" inverted when
adjusted for election event weights. Citi see 1y risk reversals sitting between
0.60-0.65 is a strong entry level for a hedge against any unexpected INR
depreciation.

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