Reserve Bank of India Governor Urjit Patel, known for calling RBI an “owlâ€, may have turned hawkish on its monetary policy stance towards the year end.
While Fed policymakers will be looking at those numbers as they decide whether to raise key interest rates as soon as June, traders will read through them to try and get ahead of the Fed decision.
Jan Lambregts, Global Head of Financial Markets Research, Rabobank US Fed is hawkish then the statement is likely to be read as a positive because market have read dovish statements from ECB and other central banks negatively.
India too may be caught in the downtrend if global markets weaken, he says, but adds that when things settle, India will stand out as one of the better markets to invest in because of falling commodity prices
Reserve Bank of India (RBI) Governor Raghuram Rajan may scale back some emergency measures that helped in bouncing back of the rupee.
Speaking to CNBC-TV18 hours before the Fed chairman Ben Bernanke makes any speech on the QE tapering, Andrew Economos of JPMorgan AMC says that Fed will aim to strike a balance between being either too hawkish or too dovish.
In a discussion to CNBC-TV18 A Prasanna, chief economist, ICICI Securities, Prasanna says that the governor will have to be hawkish, to bring down inflation and bring back the central bank‘s lost credibility in doing the same.
Analysts fear that if Larry Summers is appointed as the next US central bank chief, any scaling back in the central bank's asset-purchase programme will be ramped up by Summers and deal a further blow to the battered emerging markets (EMs).
The RBI in its first quarter (April-June, 2013-14) monetary policy left key rates unchanged hinting at rate cuts in future subject to market stability. With this, D Subbarao, the governor who had taken the central bank assignment in September, 2008; presented his last quarterly policy before he hangs up his boots in September this year.
Hawkish commentary will lead to hardening of yields, says NS Venkatesh, IDBI Bank.
The Federal Reserve's failure to communicate its guidance has made Wall Street cautious. The message from the street is to watch what the Fed does than listening to what they say.
Weak macro data, added with uncertainty on the Fed‘s front in view of its tapering off the quantitative easing (QE) will make D Subbarao, RBI governor sound more hawkish than dovish, anticipates Gambhir.
The quantum of correction may be limited as the slippage has been considerable over the last 2 sessions, says Ajay Manglunia, Edelweiss.