Buy USDINR; target of 65.05 - 65.10 | Ina000003197

Government bonds ended little changed in lacklustre trade, as investors deferred purchases ahead of a weekly debt auction. Also, political  turmoil in the US could support bonds as yields remain on the backfoot  • The benchmark 6.97% 2026 bond yield was almost unchanged at 6.68%  in the previous session  • Yield on the US 10-year rose mildly  to 2.23% from 2.22% in the previous  session.Ina000003197
Forex (US$/INR)
The rupee marked its biggest single-day fall in nearly 21 months against  US$, as political unrest in the US involving President Donald Trump  dented investors’ appetite for risk assets  • The US$ recovered slightly against major currencies due to profit  booking and recovery in yields. Even though US$ weakened against majors, it strengthened against most emerging currencies as recent political turmoil in the US has weighed on risk-on sentiment. We expect the US$ index to find supports above 96.50 level in the near term.
US$/INR derivatives strategy  Bonaz capital
In the currency futures market, the most traded dollar-rupee May contract on the NSE ended at 64.93. The May contract open interest declined 14.42% from the previous day • June contract open interest increased by 5.19% in the last session • We expect the US$ to find supports at lower levels. UtiliseIna000003197 downsides in the pair to go long on the US$INR pair.