Tuesday, April 11, 2017

Morning INR update: Geopolitical tensions dominate.

Korean peninsula risk off sentiment mostly affected the NY session driving yields lower along with USDJPY. Historical equity market selloff in May could be brewing with French Elections, Syrian standoff between US and Russia and US aggression in North Korea. Today Kashkari speaks and since most FED members now seem to be commenting on balance sheet reduction, FED speakers can drive USD higher along with UST yields.

Inflows in debt and equities have reduced this week with weaker risk sentiments. USDINR 1m NDF has moved higher showing reduced selling in the offshore market. An ecommerce company raised USD 1.4 bn USD yesterday, significant chunk of which should be converted to INR, timing unknown. Exporters are looking to sell on upticks while importers seem to be very comfortable after the recent INR appreciation. CMP 64.64, Range 64.75-64.50.

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