October 30, 2024
New Delhi, India
USDINR
Rupee (INR) weakened on Wednesday, facing downward pressure due to rising US Treasury bond yields and foreign outflows from Indian stocks. These factors have contributed to a sell-off in INR, despite the Reserve Bank of India’s (RBI) regular intervention to curb depreciation.
Oil Prices and Market Outlook
- Crude Oil Prices: A further decline in crude oil prices may support the INR, as India, the world’s third-largest oil consumer, stands to benefit from lower import costs.
- RBI’s Intervention: The central bank’s involvement is expected to provide some cushion, potentially capping the INR’s downside.
Key Economic Data Ahead
Traders are looking ahead to key US data releases on Wednesday, including:
- October ADP Employment Change
- Advanced Q3 GDP Data
- September Pending Home Sales
These reports are anticipated to impact global sentiment and INR trading.
Market and Economic Indicators
- US Consumer Confidence: The Conference Board’s Consumer Confidence Index for October rose to 108.7, surpassing estimates of 99.5.
- Fed Rate Cut Odds: Traders are pricing in a 98.4% chance of a 25 bps Fed rate cut in November, as per the CME FedWatch Tool.
- US Job Openings: Data from JOLTS reported job openings at 7.44 million in September, below expectations and a revised 7.86 million in August.
Domestic Market Highlights
- Foreign Outflows: October marked the heaviest month for foreign investor withdrawals from Indian equity and debt markets, totaling $10 billion.
- RBI GDP Forecasts: The RBI forecasts 7.2% GDP growth for FY25, with Q2 at 7.0%, Q3 at 7.4%, and Q4 at 7.4%. However, Nomura suggests the Indian economy may face a “cyclical growth slowdown,” viewing the RBI’s projections as optimistic.
Upcoming Holidays: Indian markets will close on Friday in observance of Diwali.
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