Monday, May 8, 2017

Morning INR update: Pro Risk recipe but for Chinese equities

Looking at Euro levels French election results seem to be a non event. On Friday night post NFP commodities registered a bounce which moderately improved risk sentiments. Improvement in oil prices and other commodities are reflected in Asian equities today except Shanghai stock markets. Shanghai stock markets are near critical support levels and below 3000 they would threaten for a 10% fall. In contrast the US NFP prints a healthy picture of the US economy and is reflected in DM yields. Commodities and Chinese stocks are the last remaining doubts on an otherwise pro risk global macro setting.


USDINR 1m NDF is trading 5.5p left. Equities are seeing withdrawals on a daily basis while debt market inflows continue. I would think that debt investments in India currently are driven by long INR bets. KRW has appreciated mildly over Friday. The uptick in commodities has calmed the long USDINR sentiment on Friday which happened in spite of a large 2000 cr debt inflow. CMP 64.21, Range 64.15-64.32.

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