INSIDE INDIA: Rupee Gains; Barclays Sees RBI Rate Cut Priced in

Updated on

This is an overview of India’s currency and debt markets:

FX:

  • Rupee rises 0.3% to 63.6338 per dollar; nation needs lower interest rates for GDP growth, says Junior Finance Minister Sinha
  • Pivot point at 63.7996; USD/INR’s support at 63.7205 broken, next at 63.6159, 63.4322; resistance at 63.9042, 63.9833, 64.1671
  • USD/INR below both 10-DMA of 63.7501 and 21-DMA of 63.7624
  • 1-mo. implied volatility rises 5 bps to 6.5425%; avg of past 12 mos. is 6.8946%
  • Rupee 1-mo. forwards gain 0.3% to 63.95 per dollar
  • Global funds bought net $26.7m of local equities on May 28: NSDL; Sensex gains 0.3% today
  • India’s HSBC May manufacturing PMI at 52.6 vs 51.3 in April
  • While RBI expected to ease policy further, normally a positive for INR as foreign portfolio flows are dominated by equities, Barclays sees limited scope for INR appreciation as a rate cut tomorrow is priced in, according to note dated May 31; says it’s reluctant to recommend INR carry trades given monsoon uncertainties and parliamentary hurdles on reform initiatives

GOVT DEBT:

  • Yield on 8.40% bond due July 2024 steady at 7.82%; yield on 7.72% bond due May 2025 little changed at 7.64%
  • 1-year IRS down 2 bps at 7.47%; 5-year IRS up 1 bp at 7.1050%
  • Global funds sold net $22.9m of local debt on May 28: NSDL
  • ‘Others’ category were biggest buyers (35.8b rupees) of govt bonds on May 29; primary dealers were largest sellers (32.8b rupees): CCIL data

CORP DEBT:

  • Yield on top-rated 5-year corporate bonds fell 2 bps to 8.5133% and 10-year yield dropped 1 bp to 8.4534% on May 29

Before it's here, it's on the Bloomberg Terminal. LEARN MORE