Tuesday, October 31, 2017

INR update: Range bound price action as markets await conclusive news


The arrest of former Trump aids in relation to the Russian intervention election, is just a starting point of a long drawn investigation and whatever be the result, immediately the market would ignore the risks that this poses to Trump’s presidency. FED chair announcement is on Thursday and its likely to be Powell therefore should be a non event if there is no surprise. The congressional draft of the tax bill comes out tomorrow and that would be a major market mover. Today we have Euro zone GDP and inflation. EU GDP is picking up consistently unlike the US where GDP growth has been much more volatile.

 

USDINR 1m NDF is trading 1p left while dollar weakness has led to KRW and CNH appreciation. Asian equities are mixed while FPI flows into debt continues. I would keep an eye on India 10Y yields as further inching up might suggest fiscal concerns which are compounded by the fact that Brent continues to trade near $61 levels. CMP 64.82, Range 64.86-64.72.

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