USD/INR looks on track to clock its third.....>

INDIA: USD/INR looks on track to clock its third consecutive higher close, with

USD/INR once again nearing the 70.00 handle after dropping below the mark in

early March. Electioneering continued in earnest over the weekend, with

incumbent PM Modi promising a further $1.44 trillion in infrastructure spending

should he be elected to serve another term. The proximity to April's election

(final results due in May) is beginning to be priced into volatility markets:

USD/INR 1m vols rose to the highest levels since early February this morning.

-Nonetheless, many are attributing today's fall in both the INR currency and

Indian sovereign bonds on the resurgent oil price (Brent crude futures hit

five-month highs Monday) which also fed through to lower equity prices Monday,

with the Nifty 50 retreating further from all-time highs printed last week.

-In a note published Friday (but circulated further over the weekend), Goldman

Sachs raised their INR forecasts, citing a more favourable political backdrop.

GS now see USD/INR at 69.00 in three months' time and 70.00 in six months' time.

-Indian CPI and industrial production are the key datapoints of the week, both

due on Friday.