The Healthcare vote got postponed to today and markets
traded in a range. Although it’s impossible to sense the outcome of such negotiations,
but I would think it is too early for fellow Republicans to go against their own
President and therefore Trump, given his reputation for deal making, should get
what he wants.; This in turn should be positive for equities, UST yields should
go higher, USD Index should bounce while EM currencies should appreciate
against USD.
USDINR 1m NDF spread is shrinking showing reduced offshore
selling in the pair. Yesterday ~1500 cr FPI inflows were recorded as compared
to over 5000 cr each day on Tuesday and Wednesday. Yesterday evening we saw aggressive
bids from Nationalized banks and a Private bank driving USDINR to 65.55 levels.
Today EM currencies are mildly weaker to flat since yesterday. Equity markets
remain sideways ahead of the vote. CMP 65.47, Range 65.39-65.57. A break either
side can result in an incremental 10p move.
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