Expect rupee to test 57 per dlr in three months: JP Morgan
Reuters Market Eye - J.P.Morgan expects USD/INR to test 57 per dollar in the next three months as Narendra Modi's sweeping electoral victory "is a more transformational outcome for India macro than most could have imagined" and will thus attract foreign inflows.
The bank adds it expects Modi to fight inflation through administrative measures, and the focus on the RBI should reduce.
As a result, J.P.Morgan recommends receiving 5-year OIS expecting the rate to fall 25-50 bps, inverting the swap curve further.
However, J.P.Morgan warns that higher borrowing from the new government could hurt longer-tenure bonds and recommends investors stick to the 5-year government bonds for carry.
(Reporting by Neha Dasgupta)
- Tweet this
- Share this
- Digg this
- Pakistan crisis puts army back in the driving seat
- UPDATE 1-Pakistan crisis puts army back in the driving seat
- U.S. strikes have slowed Iraq militants but not weakened them - Pentagon
- Islamic State video purports to show beheading of U.S. journalist
- Islamic State fighters halt Iraqi offensive to recapture Saddam's home town
Exclusive - Icahn says Family Dollar wasting over $300 mln in breakup fees . Full Article