Middle East respite for rupee amid equity outflows; bond yields to track US peers
By Dharamraj Dhutia and Jaspreet Kalra
MUMBAI, Oct 28 (Reuters) -The Indian rupee is likely to be take a bit of support from the abatement in the Middle East risk in the face of persistent equity outflows and dollar strength, while government bond yields will track the move in U.S. Treasury yields.
The rupee INR=IN closed at 84.08 against the U.S. dollar on Friday, nearly unchanged for the day as well as the week. The rupee has fared better than its Asian peers over October, largely on account of regular interventions by the Reserve Bank of India amid foreigners taking money out of local equities.
Overseas investors have pulled out more than $10 billion from local stocks in October so far.
For now, the rupee "appears to be glued" to a narrow range, which is unlikely to change in the near term, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.
The rupee will receive a bit of help from the plunge in oil prices on Monday after Israel's weekend strike on Iran bypassed oil or nuclear targets.
The U.S. personal consumption expenditure (PCE) inflation reading and employment data on Thursday and Friday, respectively, will be in focus to gauge the future path of the Federal Reserve's policy rates.
Meanwhile, India's 10-year benchmark government bond yield IN071034G=CC closed at 6.9495% on Friday, up 3 basis points for the week, mirroring the rise in the prior week.
Traders expect the yield to be in the 6.80%-6.88% band this week, with no major triggers in sight and the focus remaining on its U.S. peers as well as foreign activity.
There may not be any major upward pressure on yields as there is no central government debt supply scheduled for the week, traders said.
Meanwhile, the 10-year U.S. yield US10YT=RR stayed around 4.20%, as traders braced for a less aggressive Fed rate cut path and the outcome of the U.S. presidential elections.
Foreign investors and foreign banks have remained net sellers of government bonds so far this month, amid caution ahead of the elections and the next Fed meeting, both due in the first week of November.
"In the event of a Donald Trump presidency, the impact will likely be inflationary and therefore, bad for bonds, as the Fed will most likely be unable to cut as much as what the market has priced in currently," said Matthew Kok, portfolio manager, Asian Fixed Income, Eastspring Investments.
"This means that the market will start pricing out rate cuts, which in turn means higher yields globally."
KEY EVENTS:
U.S.
** October consumer confidence - Oct. 29, Tuesday (7:30 p.m. IST)
** Jul-Sept advance GDP - Oct. 30, Wednesday (7:00 p.m. IST) (Reuters poll 3%)
** Initial weekly jobless claims week to Oct. 21 - Oct. 31, Thursday (6:00 p.m. IST)
** September personal consumption expenditure, core PCE index - Oct. 31, Thursday (6:00 p.m. IST)
** October non-farm payrolls data and unemployment rate - Nov 1, Friday (6:00 p.m. IST)
** October ISM manufacturing PMI - Nov 1, Friday (7:30 p.m. IST)
** October S&P global manufacturing PMI final - Nov 1, Friday (8:15 p.m. IST)
India
** September fiscal deficit data - Oct 31, Thursday (3:30 p.m. IST)
** September infrastructure output data - Oct 31, Thursday (5:30 p.m. IST)
** HSBC October manufacturing PMI - Nov 1 Friday (10:30 a.m. IST)
Reporting by Dharamraj Dhutia and Jaspreet Kalra; Editing by Savio D'Souza and Rashmi Aich
Aset Terkait
Berita Terbaru
Pengungkapan: Entitas XM Group menyediakan layanan khusus eksekusi dan akses ke Fasilitas Trading Online kami, yang memungkinkan Anda untuk melihat dan/atau menggunakan konten yang tersedia pada atau melalui situs, yang tidak untuk mengubah atau memperluas, serta tidak mengubah atau memperluas hal tersebut. Akses dan penggunaan ini selalu sesuai dengan: (i) Syarat dan Ketentuan; (ii) Peringatan Risiko; dan (iii) Pengungkapan Penuh. Oleh karena itu, konten disediakan hanya sebagai informasi umum. Anda juga harus ketahui bahwa konten Fasilitas Trading Online kami bukan sebagai ajakan atau tawaran untuk untuk melakukan transaksi apa pun di pasar finansial. Trading di pasar finansial mana pun melibatkan tingkat risiko yang signifikan pada modal Anda.
Semua materi yang diterbitkan di Fasilitas Trading Online kami hanya untuk tujuan edukasi/informasi dan tidak boleh mengandung nasihat dan rekomendasi finansial, pajak investasi atau trading, catatan harga trading kami, penawaran, permintaan, transaksi dalam instrumen finansial apa pun atau promo finansial untuk Anda yang tidak diminta.
Konten pihak ketiga apa pun, serta konten yang disiapkan oleh XM, seperti opini, berita, riset, analisis, harga, informasi lain atau link ke situs pihak ketiga yang tersedia "sebagaimana adanya", sebagai komentar pasar umum dan bukan menjadi nasihat investasi. Sejauh konten apa pun ditafsirkan sebagai penelitian investasi, Anda harus memperhatikan dan menerima bahwa konten tersebut tidak dimaksudkan dan belum disiapkan sesuai dengan persyaratan hukum yang dirancang untuk mempromosikan kemandirian riset investasi dan dengan demikian akan dianggap sebagai komunikasi pemasaran di bawah hukum dan peraturan yang relevan. Mohon dipastikan bahwa Anda telah membaca dan memahami Notifikasi pada Riset Investasi Non-Independen dan Peringatan Risiko kami mengenai informasi di atas, yang dapat diakses disini.
