From the collapse in the British pound to Japan's once-in-a-generation market intervention, alarm in South Korea about its southbound currency and the worrying swoon in the Chinese yuan, the underlying driver is an epic rally in the dollar.
This week’s expected repo rate hike will be the fourth in a row since May. At 5.90 percent, the repo rate would be the highest since April 2019
The RBI is set to raise interest rate for the fourth time in a row at its Monetary Policy Committee outcome on Friday to tame stubborn inflation.
Selling pressure by foreign investors in equity markets also dampened the sentiment in traders. FIIs sold over Rs 10,000 crore in local equities in the last one week
External risks have increased since the Monetary Policy Committee’s August meeting and the pressure on the rupee will weigh heavily on their deliberations
Despite the heavy selling, some analysts expect foreign investors to keep buying Indian equities amid continued strong monthly data and falling crude oil prices.
The rupee sank to a new low of 81.26 against the dollar on September 23 in intraday trade, down from 80.87 in the previous session
This was the seventh out of eight sessions when the currency dropped and lost over 2.51% in this period. So far this year, it fell around 8.48%.
The US Fed hiked interest rates by 75bps for the third consecutive time. While experts and the markets were expecting this one, what’s spooking them is the dot plot - which implies that there will be cumulative hikes of 125 bps over November and December. But what do these numbers mean for India, and will the RBI follow in the Fed’s footsteps?
The Federal Reserve enacted another aggressive interest rate hike of 75 basis points to tackle inflation
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Soaring prices that are putting the squeeze on American families and businesses have already become a political liability for President Joe Biden, as he faces midterm congressional elections in early November.
On the eve of the FOMC meeting, the market has already priced in a 75 basis point hike. Investors will look for clues whether the fall in inflation expectations and the slowing of US growth will make the Fed less hawkish
The worry in the markets is that the Fed is misreading the situation and tightening at a time when growth is slowing and inflation has peaked. The hope is that the Fed will pivot sometime next year
Weakening retail sales and slowing manufacturing indices may be leading indicators of a possible recession. However, the Fed could continue to hike rates well into the next year to prevent the inflation from getting entrenched.
"From here on, we are still more cautious, there are signs of some breather coming to the market if inflation starts coming down significantly, says Agarwal. “There is still some time for that to happen."
The exterior of the Marriner S. Eccles Federal Reserve Board Building is seen in Washington, D.C.
The 10-year Treasury yield slipped from three-month highs hit earlier in the session, boosting shares of rate-sensitive stocks such as Tesla Inc, Microsoft Corp and Amazon.com Inc
India is bracing for the ripple effect of the frontloading of rate hikes by the US Fed. The question is, can it have the last laugh
The US faces a perfect storm of rising financing costs, squeezed demand and increased supply
In spite of a sticky inflation, and a choppy geopolitical situation, from banking to pharma to Big Oil — all are convinced of sunny days ahead
However, inclusion of Indian sovereign bonds in global bond indices, if and when that happens, may funnel flows into domestic debt.
The central banker missed an opportunity to regain control of the Federal Reserve’s policy narrative
Among Nifty stocks, Tech Mahindra, Infosys, Hindalco Industries, HCL Tech and Wipro, which count the US as a major market, were the worst hit in the morning trade, down 3-6 percent
The responsibility of central bankers to deliver price stability is unconditional.