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Market Roundup

* The Indian rupee is expected to open slightly higher after Tuesday’s holiday. The expectation of foreign fund inflows and the central bank’s intervention remains the theme for the rupee’s movement. The forward market indicates spot USDINR opening around 83.28 from Monday’s close of 83.32.

* Technical set-up for spot USDINR remains bullish as long as it sustains above 82.90 while surpassing 83.50will pave the way for 83.70 and 84.

* Asian currencies, stocks and bonds will struggle to find direction ahead of the upcoming US CPI report which will either validate or lessen the possibility of a delay in Federal Reserve rate cuts. The dollar is nearly unchanged as US shares trade mixed while Treasury yields ease ahead of Wednesday’s CPI report.

* In commodities, oil held a two-day decline after an industry report pointed to a gain in US crude stockpiles, although simmering tensions in the Middle East are expected to cap losses.

* Ahead of the data, U.S. interest rate futures set the odds of the first cut occurring in June at about 60%, up from 51% on Monday, according to CME Group's FedWatch tool, although the possibility of a hold has bumped up to 40%.

* Traders will also eye minutes from the March 19-20 FOMC meeting. It should explain why several more FOMC participants shifted their views toward fewer rate cuts for 2024, even as the median still anticipates 75 basis points of cuts this year. The FOMC minutes will show that most officials see a Goldilocks economy while inflation is on track to moderate gradually. That’s why their baseline is still for rate cuts this year.

* The ECB is expected to keep rates unchanged on April 11, but odds are increasing that President Lagarde and Co. will likely need to ease policy in June to achieve a soft landing.

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