HALISTER1: India Inflation Miss May Spur Advance in USD/INR NDF: Analysis

India Inflation Miss May Spur Advance in USD/INR NDF: Analysis

(Bloomberg) -- With India’s CPI expected to accelerate in May, an estimate miss may see USD/INR 1-mo. NDF rising toward the 21-DMA of 67.44 as investors reconsider the possibility of rate cuts.
  • On March 14, the last time monthly CPI data undershot estimates, USD/INR 1-mo. NDF gained 0.3%
  • Consumer prices probably rose 5.60% y/y, up from 5.39% gain in April, median est. in Bloomberg survey shows
    • Ests. range from +5.15% to +5.90%; data due at 5:30pm Mumbai time on June 13
  • RBI said in June 7 monetary policy statement that inflation surprise in the April reading makes the future trajectory of inflation somewhat more uncertain, with upside risks
    • Top forecaster, as ranked by Bloomberg, is among those forecasting May CPI at top of range at 5.90%
    • Next RBI policy meeting is on Aug. 9
  • 1-mo. NDF little changed at 67.08 today
    • NDF’s slow stochastics %K line crosses above %D line to 27
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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