By Vincent Mivelaz
The Reserve Bank of India will update today on monetary policy. Investors will see if central bankers maintain the benchmark lending rate at 6% (fully priced-in scenario) or reduce it by 25 basis points (unexpected), due to a lower inflation rate (4.44% expected at the next release of 12 April). The RBI is committed to reducing inflation (which was at 11.51% in late 2013), despite crude oil price increases since June 2017 (30%).
As US equities recover from Monday’s decline, investors are waiting for signs of trade war escalation and potential inflation. The Sensex remains solid following a January decline (-1.03% year to date) at 33’461 (+1.50% this week), supported by Consumer Discretionary (+3.46%), Consumer Staples (+1.39%) and Health Care (+1.15). 2-year, 10-year and 30-year treasuries are steady at 6.81%, 7.29% and 7.94%.
The rupee remains behind most Asian currencies versus USD (USD/INR: +2.13%), currently at 65.05 and expected to increase toward the 65.25 range.
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