While in the past they have had a signaling impact for impending economic slowdown, we feel factors governing this business cycle and impact of global central bank’s monetary policy may make the reading different this time.
The possibility of a big jump in crude prices hereon appears slim as at this price many shale gas producers could up their output. Further, correlation studies don’t show high crude prices hurting stock market returns.
Xi reiterated goal for achieving “moderately prosperous society” by 2020 along with an emphasis on structural reforms for almost every facet of the socio-economic set up. The implication here is for the “soft landing” of the Chinese economy along with reforms on both domestic and international fronts.
IMF's report recently downgraded India's growth prospects. India has its back to the wall with windfall gains from falling crude might not be available soon.
The relief to the consumers comes at the expense of government finances that are already struggling
The message is loud and clear – with myriad headwinds impacting prices, rates are not the only answer to growth revival.
Catalonia’s impact on markets has been limited so far, but the political discourse in Spain bears close watching.
The worst nightmare of any central bank appears to be unfolding now. After the last policy, none of the data points seems to have lend incremental comfort.
The slogan “acche din” now sounds like a bad joke, given the steady deterioration of macroeconomic indicators. This is adding to the pressure on the Reserve Bank of India to cut interest rates.
In the short run, the Euro could be choppy, tending towards weakness. Indian exporters to Eurozone should keep an eye on the unfolding political landscape and the monetary policy meetings later in October.
The US Fed’s continued stance on the policy rate normalisation is apparently positive for the US dollar, particularly with respect to emerging market currencies.
It may be early to ring alarm bells, but macro indicators are far from comforting. Unless things improve meaningfully in the second of this fiscal, equities will struggle to climb higher, no matter how strong the inflows into mutual funds.
RBI might continue to intervene in the market to prevent appreciation that can cause incremental damage to the economy.
With the exit of US Fed Vice Chair Stanley Fischer, it creates four vacancies in the 7-member board of governors in Federal Reserve and gives enough leeway to President Trump to work on his banking reforms.
Low GDP numbers do not essentially mean lower profitability in the following quarters.
The hermit kingdom’s posturing has already strained relationships with its neighbours and the United States and might require the UN Security Council’s emergency response.
Can India’s fan following still be taken for granted, or will investors’ eyes wander?
China’s trade dominance could be a source of disruption if war breaks out.
Can the government’s ambitious disinvestment programme not only reach its target but also make up for lower RBI dividend? A look at the status of proceeds.
Both global macro and micro environment provide a conducive backdrop for Indian companies having global linkages. However, in the absence of a major central bank meeting or major fixtures on the global earnings calendar, market sentiment can be more vulnerable to other factors.
Markets may be staring at a scenario of no further rate cuts in the remaining part of calendar 2017 unless GST adjustment pangs turn out to be worse than apprehended.
Growth appears to be a niggling worry, as borne out by recent industrial production, as well as core sector data.
As the political upheavals left no mark, it is perhaps time to pay heed to more fundamental factors like earnings and macro developments.
As major central banks are getting confident of positive macroeconomic signals, they may curtail accommodative monetary policies, which might not go down very well with equity investors.
The remarkable shift in India’s foreign policy stance is one reason why investors should take note of rising risk premium.