US10Y has convincingly broken 3.05% (now at 3.1%) with 10-2 spread at 51bps+. This is a dollar positive setup and a weekly closing on the dollar index above 93.43 should clear the way for 95.15.
USDINR 1m NDF has cooled off to around 9p right now as compared to 12p right yesterday. EM currencies continue to appreciate since day before yesterday evening led by TRY, MXN, ZAR and RUB. Oil trading at 79+ levels continues to put pressure on India 10Y yields (7.932%). Along with EM currencies, BJP forming the government perhaps is also keep INR stable for the time being. FIIs continue to pull out money from Indian assets (although not in huge sums). Price action seems to suggest intermittent selling by RBI. Medium term view remains of INR weakness. CMP 67.63, Range 67.55-67.80.
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