How the war in Iran is already affecting UK farmers and food production 
Stock Futures Dip as Investors Await Key Payrolls Data 
Will a new border deal with the US open a backdoor into Kiwis’ personal data? 
RBC Capital: European Medtech Firms Show Minimal Middle East and Energy Risk Exposure 
Global Markets React to Strong U.S. Jobs Data and Rising Yields 
Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
The four types of dementia most people don’t know exist 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
God on their side: how the US, Israel and Iran are all using religion to garner support 
Amid our largely constructive assessment for EM Asia FX, it is shifted more vigilant thought on the INR outlook. The currency now exceeds the +5% threshold across our fair value metrics.
To be sure, the mean-reversion to fair value is not an instantaneous process (rather a multiyear process), and our ex-ante assumption is for a 2% capital loss in the INR FX over the next 12 months.
This is counter-balanced by the fact that INR NDF provides a prospective real positive carry of 1.50%-1.75%, such that total expected returns are marginally negative. There is clearly no longer the buffer of a year ago when the INR was 0.6% below fair value.
Asia yielders IDR and INR are unlikely to experience much spot appreciation even in a risk-on environment (central banks will limit the gains). But on a carry-to-vol perspective, they continue to screen well. Additionally, with rising FX reserves, there is plenty of scopes to limit any damage from flare-ups in risk aversion.
Bearish INR risk scenarios:
1) Crude oil price gains accelerate;
2) The fiscal position deteriorates;
3) Exports continue to underperform.
Bullish INR risk scenarios: Reform process accelerates; India exports play catch up with the regional trend.
