Technically USD index looks like headed to 95.9 levels from the current 94.75. The weakness on Friday was because of the increased likelihood of Powell as the FED chair. I would have thought that Powell was already a consensus and therefore I believe an actual Powell announcement now should have limited impact on yields and USD. Muller has filed charges on the Russia investigation and there could be some arrests today (if any). It is not announced as to who that person would be but in case it is someone near the administration then we could see fresh political turmoil in the US and return of dollar weakness (although looks unlikely). Rumours suggest that Kuroda is likely to get a second term in BOJ and the BOJ meeting this week is likely to maintain its accommodative stance, both of which is negative for Yen. On 1st of November the next step on tax cuts is released, i.e., the congress’s draft of the bill which could help dollar advance. This is a data heavy week with FOMC, ISM and finally the NFP on Friday. Going by the recent macro prints in the US all/most of these could paint a rosier picture of the US economy.
USDINR 1m NDF is trading 1 p left. The dollar weakness has already given a 0.25% INR appreciation since Friday close which is in line with other Asians. Brent trading above 60 might mean the return of CAD worries for India. Equity markets domestically trade strong post the recapitalization of PSU banks and along with US stock markets. India 10Y yields is slowly inching higher now at 6.84. USDINR can move towards 65.30 levels during the week with USD strength, with this view I would expect limited downside today. CMP 64.90, range 64.85-65.02.
No comments:
Post a Comment