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Market Roundup

* The Indian rupee, in line with the Asian currencies, is expected to open steadily but could face pressure amid foreign fund outflows and higher commodity prices. The underperformance of domestic equities amid high valuations and expectations of a surge in food inflation could push the bond and rupee lower in the near term.

* On Monday, spot USDINR gained 7 paise to 83.50, gained for the second day in a row. Technical set-up remains constructive for the bulls amid higher dollar demand. However, the central bank’s intervention and expectations of dollar inflows in the coming month from MSCI bond inclusion will limit the gains. The pair has support at 83.30 and resistance at 83.60.

Forex:

* The greenback and other haven currencies retreated versus G-10 counterparts on Monday as the S&P 500 index looked set to rise for a third day amid confidence the Federal Reserve will lower rates later this year. 

* Fed Bank of Richmond President Thomas Barkin said he expects high rates to slow the economy further and cool inflation to the 2% target. 

* European Central Bank Governing Council member Gediminas Simkus said he sees borrowing costs being reduced three times in 2024 — starting with the planned move in June.

Equities:

* Asian stocks eked out gains, following Wall Street’s advance. US stocks enjoyed their best three-day rally since November. The global equity markets are getting a lift as investors revise their Fed policy bets due to soft US jobs data, Asia is also benefiting from renewed hopes for China and optimism for India, the world’s fastest-growing major economy.

Commodities:

* The shifting geopolitical landscape kept energy markets on edge. Expectations of rate cuts triggered a risk-on tone across markets, pushing metal prices higher. WTI oil pared gains to 0.5% after Hamas said it agreed to a cease-fire proposal by Qatar and Egypt. Earlier, Saudi Arabia lifted prices for all grades

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