The lack of impact that the shutdown had, shows how equity markets have gained in confidence over the last few years. It has increasingly become difficult for events to create a significant risk off sentiment across asset classes, as governments and central banks have become risk sentiment managers. Consequently this is the longest winning streak on US equities without a 5% correction. Today we have the BOJ and any hint of a policy normalization would cause Yen strength and add to the ongoing dollar weakness.
USDINR 1m NDF is trading 2p left while EM currencies have depreciated mildly since yesterday. Equity markets in Asia continue to rally along with the DMs. Last 1 month EM currency appreciation has been more than INR which has suffered due to increasing concerns about fiscal deficit and current account deficit. With most corporate results showing signs of pickup in the economy, FII inflows into equities seem to be picking up. CMP 63.83, Range 63.96-63.72.
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