Teresa May announced early elections in June 2017, riding on
a wave of populism. Polls suggest that her party has at least 20% points more
support than the second party currently in the UK population. May wants to use this
support to get higher number of seats in the Parliament, in order to ensure
that Brexit negotiation with EU doesn’t get opposed in the house. This bodes
well for UK’s negotiating ability with the EU, i.e., only if May wins a higher
number of seats, which as of now looks likely.
The negative surprise in US data print continued with
Industrial Production printing below consensus. US10Y yields have started
showing the weakness in data but with little impact on equities till now. Euro
zone CPI which has been steadily increasing on YOY basis can take the dollar
index below 99.50 support.
USDINR 1m NDF is trading 4p left only indicating reduced
selling in NDF markets. Yesterday we saw nationalized banks selling near 64.60
levels. Indian equity markets have started showing signs of weakness. Other EM
currencies trade stable. CMP 64.56, Range 64.62-64.46.
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