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India 50 Cash
Friday’s election results saw a breakout in the India 50 Cash as it traded to a high of 7594. The BJP-led alliance smashed expectations with over 320 seats and this surpassed even the top end of forecasts. This should allow the new government to tackle legislative reforms and could see risk extend gains in India today after a bit of a pullback from Friday’s highs.
Iron ore dropped to 100.70 on Friday. The last time iron ore was below 100 was back in 2012 and this will surely continue to hurt the pure plays in particular. While the price action continues to deteriorate, analysts are increasingly feeling there is value in the iron ore names. FMG is testing September 2013 lows with support in the$4.50 region.
The local currency continues to hold up well in the face of significant challenges including fiscal tightening from last week’s budget. While data is limited locally, China property prices due later today will deserve some attention. Any further signs of deterioration are likely to lead to a risk-off trade and could weigh on the AUD.
EUR/USD sidelined at 1.37 and will be a key one to watch this week with other key readings such as manufacturing and services PMIs along with a German monthly report. Later today we also have German Buba President Weidmann speaking and there will be focus on the Ukraine heading into the May 25 elections.