The NFP brought cheer to risk assets with higher job creation and lower wage growth. This makes tomorrow’s CPI print in the US the next important data across asset classes. US equity markets are within 3% range of all time highs while DAX and locally Nifty continue to lag behind. US10 year would need significant inflation pick up for it to cross 3%. USD Index continues to remain in a narrow range with 90.5 as a strong resistance.
NDF shows mild buying pressure while EM currencies have appreciated along with the risk rally overnight. Today we have the India CPI (prior 5.07%, consensus 4.74%). Trade number should be out on 15th or 16th March (prior -$16.2 bn, consensus -$14.2bn). Going by the past few months both these prints can put upward pressure on USDINR, driving the pair again towards 65.20 or slightly higher during the week. But once these 2 prints are digested, markets might look at seasonality and financial year end flows which can take the pair towards 64.60 by the end of the month. CMP 65.00, Range 64.95-65.10.
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