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

INDIA: USD/INR heads into the Tuesday close at the lower levels of the session,
with markets now headed back toward the 100-dma at 70.2286 after closing above
the mark yesterday. INR is benefiting slightly from the modest rebound in global
risk sentiment, helping buoy equities (Sensex and Nifty 50 up around 0.8%
apiece) and helping flatten the sovereign curve.
-Wholesale and consumer inflation data was broadly inline (CPI slightly softer,
wholesale prices slightly higher) which should do little to alter the RBI's rate
path, although some wires are citing the modestly softer CPI (April data missed
by 0.07ppts) as spurring rate cut hopes.
-Proximity to Indian election results (due May 23rd) is less of a concern to
markets at present, with analysts and forecasters still eyeing another Modi term
(albeit with a smaller margin of victory) with most domestic analysts eyeing the
RBI's plans for liquidity as a more significant market driver.
-INR implied vols continue to tick higher, with the 1m measure approaching the
December highs of 9.84 points. A move north of here would be highest reading
since 2015.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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