Multi-Asset Weekly Newsletter

7 November 2026 | By IFA GLOBAL | Category - Market

Weekly Newsletter

INR ASSETS SHINE AS AI TRADES UNWIND AND CRUDE DROPS

GLOBAL DEVELOPMENTS: Democrats captured both chambers in the US midterms, flipping the House and taking the Senate. AI infrastructure names sold off on fears of slower data center build-outs and tighter regulation, with Kospi, Taiwan and Nikkei still ending the week down 11-12%. Trump said he wanted to give Iran diplomacy more time before further strikes, adding the war ends soon “one way or the other”. Brent fell 16.4% on the week to USD 98.32, its biggest drop since July. Odds of a December Fed hike eased from 71% to 67% as equities sold off, then jumped to \~75% after strong October payrolls (+165k vs +65k expected, unemployment 4.1%), firming the Dollar and US yields. INR assets outperformed on lower crude and rotation out of crowded AI trades.

Foreign Exchange:

The US dollar strengthened against most G10 currencies this week, led by NOK (-2.71%) and AUD (-2.35%), followed by NZD (-1.55%), CAD (-1.09%), SEK (-0.73%), JPY (-0.58%), GBP (-0.29%), EUR (-0.15%) and DKK (-0.14%). CHF (+0.55%) was the only G10 currency to gain.
The British pound weakened 0.29% against the US dollar this week.
The euro declined 0.15% against the US dollar this week.
Among Asian currencies, INR (+1.10%) and CNY (+0.33%) gained against the US dollar, while KRW (-0.43%), SGD (-0.35%) and MYR (-0.05%) lost ground.
Rupee traded a 93.82-95.03 range this week and ended at 93.91 compared to previous close of 94.95.
3m ATMF onshore implied volatility is at 4.90% and offshore is at 5.00%.
The forward premium curve in implied annualized yield terms stands at 3.95% for 1 month, 4.59% for 3 months, 4.47% at 6 months and 3.91% at 12 months, before declining to 3.51% at 2 years, 3.48% at 3 years and 3.40% at 5 years.
FX Reserves fell USD 2.7bn to USD 717.1bn in week ended October 30.

Fixed Income:

Global 10-year yields were mixed this week, with Japan (-13.9 bps) and Australia (-9.9 bps) leading declines, followed by France (-2.4 bps), South Korea (-2.2 bps) and Switzerland (-2.0 bps), while the US (+2.3 bps), UK (+2.3 bps) and Germany (+1.3 bps) edged higher.
Yield on the domestic 10y benchmark traded a 7.07-7.36% range this week and ended at 7.19% compared to previous week close of 7.41%.
Banking system liquidity surplus widened sharply to Rs 1.6-2.3 lakh crore this week (from ~Rs 0.3-0.5 lakh crore last week). Overnight MIBOR fixings happened in 5.49-5.72% range this week.
1y OIS fell 39 bps this week to 6.33% while 5y OIS fell 38 bps to 6.48%.
1y Tbill is at 6.52% while 1y A1+ CD is at 7.90% and 1y A1+ NBFC CP is at 8.30-8.35%.
10y Nabard is at 7.94-7.99% and 10y LIC Hsg Fin is yielding 8.17-8.22%.
FPIs bought net USD 400mn of domestic bonds in November so far.

Commodities:

Commodity markets witnessed sharp swings, with Brent crude falling 16.42% to USD 98.32 per barrel and WTI declining 12.76% to USD 90.83.
European natural gas fell 17.66% to EUR 85.59, while US natural gas rose 3.45% to 3.00.
Among industrial metals, LME aluminium slipped 0.21% to USD 3,062.50 and copper declined 2.73% to USD 13,768.00.
Precious metals rallied, with gold gaining 5.06% to USD 4,070.80 and silver rising 5.74% to USD 51.92.

Our Views: What we like?

FX : We expect Dollar strength against majors. Though Democrat victory is widely seen as Dollar negative, we believe it instils confidence in Dollar and is negative for De-Dollarization bets

Rupee is now likely to remain sideways and firmly under RBI's control atleast until end of 2026. Break of 94.20-94.40 is significant since it had been holding extremely well.

We expect a 93.10-94.50 range for Rupee over the next few weeks.

Fixed Income : 7.50% level on 10y held very well. We had recommended going long duration at those levels. We had also suggested receiving 5y OIS around 6.85% which worked well

We expect a 6.90-7.30% range for the 10y over next few weeks.

Commodities : We have been advising long precious metals, a call which has faced headwinds. However we stick to that view and strongly believe it should be a part of portfolio allocation.

Crude has again fizzled out around USD 120 and that remains a major hurdle.

We are bullish on base metals as well.