Metals and commodities came under pressure over supply concerns relating to the trade sanctions put on Russia meanwhile the flattening of the US curve continued to gather attention but with limited impact on other asset classes. The beige book survey revealed that steel and aluminium stocks are being built in fear of increased tariffs and the price rise is being fed to customers in some cases, this could firm the inflation expectations in the near term make the yield curve flatter. Trump and Abe’s summit resulted in expected and measured statements.
Brent trading at 73.9 levels and India 10 Y at 7.59% (yesterday 7.54%) would continue to put pressure on INR. EM currencies have mildly appreciated since yesterday although USDINR did not show signs of coming lower in the offshore market. Bond outflows continued along with moderate equity outflows. Price action suggests that RBI sold USDINR yesterday above 65.75 and today at 65.85 levels, giving me confidence in my belief that RBI would not allow a runaway INR depreciation considering its large reserves. CMP 65.79, Range 65.74-65.95.
No comments:
Post a Comment