ECONOMIC OUTLOOK
Dollar tentative, yen dips on muddled Fed rate-cut outlook
The dollar remained steady while the yen gave up some gains as investors awaited a Federal Reserve rate cut decision. Mixed U.S. jobs data left traders uncertain about the scale of the cut. The yen, euro, and sterling showed minor changes in early Asia trade, with eyes on upcoming U.S. inflation data for further clues.
Tepid China demand and surging inventories sent copper to multi-month lows
Copper prices have dropped over 17% from their highs due to weak Chinese demand, high inventories, and a strong US dollar. Despite a long-term bullish outlook, near-term prices remain pressured
Domestic demand drives services sector PMI to 5-month high in August
India's services sector activity reached a five-month high in August, driven by increased business activity and new work, despite a slowdown in employment growth. The HSBC India Services Business Activity Index rose to 60.9 from 60.3 in July. However, the outlook for the private sector has moderated due to competitive pressures.
Is there increased recession fears in the US markets after selloff? Here's what you should know
US may be closing in on an impending recession very steadily, as the fears of the same is taking a rapid turn due to the selloffs. How will the United States combat any impending recession fears, when it indeed arrives for a long period of time and hampers the national economy?
ET World Leaders Forum: Cautiously optimistic on global economy, says Rich Lesser, Global Chair, BCG
Rich Lesser, global chair of Boston Consulting Group, expresses confidence in the economic prospects of India and the US. BCG has seen significant growth in India and expects continued success. The US economy is also expected to remain strong regardless of the upcoming presidential election. Lesser highlights the resilience of these economies and the potential for AI and technology advancements.
India's factory activity growth hits three-month low of 57.5, PMI shows
In August, India's manufacturing growth slowed to a three-month low due to a significant softening in demand. The HSBC India Manufacturing PMI dropped to 57.5 from July's 58.1. Although demand remained strong, international demand saw its weakest growth since January. Inflation concerns and competition affected business optimism.
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RBI Guv Shaktikanta Das attributes India's Q1 GDP fall to EC model code of conduct, reduced spending; says 'growth story is intact'
India's GDP growth slowed to 6.7% in the April-June quarter, down from 8.2% a year ago, primarily due to decreased government spending amid the Lok Sabha elections. Despite this, key sectors like consumption and manufacturing showed strong performance. RBI Governor Shaktikanta Das remains confident in achieving the 7.2% annual growth target, supported by anticipated increases in government expenditure and positive trends in agriculture.
Economy can grow over 7% on structural reforms, says CEA
The Indian economy can sustain a 7% growth rate over the medium term if it continues structural reforms, according to chief economic advisor V Anantha Nageswaran. Despite a recent slowdown due to general elections, strong private investments and healthy consumption are likely to maintain growth momentum. Risks include financial market corrections and geopolitical conflicts.
At the onset of GDP data, Equirus says India's economic landscape remains promising
As the government prepares to release its GDP data for Q1 of FY 2024-25, analysts hold a mix of expectations due to recent heatwaves and the election cycle. However, the overall economic outlook remains positive, supported by stable macroeconomic indicators, improving consumer sentiment, and a recovering rural economy.
India Q1 FY25 GDP data: Will reviving rural growth beat effects of election-time capex lag?
India Q1 FY25 GDP data: India's economy is projected to grow between 6.9% and 7.2% in Q1 FY25, affected by lower government spending and slowed urban growth. Various forecasts predict slower quarter-on-quarter growth than the Reserve Bank of India's estimates, driven by election-related spending cuts and moderated urban consumption.
Indian economy remains resilient amid global uncertainties: NCAER
Personal loan credit growth and bank credit for the services sector has decelerated, it added. The economic think tank said: "The Purchasing Managers' Index (PMI) for manufacturing and services declined marginally in July 2024 but maintained its expansionary momentum".
How bearish market predictor Marc Faber got his name Dr Doom
Faber began writing his bearish outlook reports in the 1970s, initially for personal use and to address the lack of awareness among Americans about foreign exchange rates, the dollar's value against gold, and European currencies at the time. As the publisher of the widely respected "Gloom, Boom & Doom Report," he offers contrarian perspectives on global financial markets, highlighting the importance of cautious investing and the potential for significant economic downturns.
SBI Research anticipates Q1 GDP growth at 7.1%, in line with RBI forecast
The Indian economy is projected to grow by 7.0-7.1% in Q1 of 2024-25, according to an SBI Research report. This forecast, however, carries a downward bias. The Reserve Bank of India has predicted a 7.2% GDP growth for the entire fiscal year, with quarterly growth estimates of 7.1% for Q1.
Oil climbs on Mideast escalation fears, US rate cut expectations
Oil prices increased amid concerns about the Gaza conflict escalating regionally. Brent and U.S. crude futures rose as fighting between Hezbollah and Israel intensified, potentially impacting oil supplies. An optimistic economic outlook fueled by anticipated U.S. interest rate cuts also contributed to the price surge, while the U.S. bolstered its Strategic Petroleum Reserve.
Oil set to end week lower on demand concerns, easing supply woes
Oil prices remained steady in early Asian trading on Friday but are expected to end the week lower. Revised U.S. employment data and ceasefire talks in Gaza have raised demand and supply concerns. Both Brent and WTI crude futures experienced fluctuations, influenced by the economic outlook and geopolitical developments.
Finance Ministry's monthly economic review sees food inflation falling in coming months on rain bounty
As per latest data, retail inflation in India came down to to 3.5 per cent in July 2024, the lowest since September 2019, primarily because of a moderation in food inflation. FinMin's report highlighted that the steady progress in the southwest monsoon has helped kharif sowing.
India retained its growth momentum in Q1 of FY25, says FinMin's monthly economic review
As highlighted by the report, India's key economic indicators present a positive outlook, underpinned by robust domestic activity, improving external trade, and growing capital flows. It also showed that perceived employment conditions show mixed signals, overall growth indicators suggest sustained momentum as FY25 progresses.
Dollar doldrums deepen on dovish Fed tone before Jackson Hole
The dollar hit its lowest levels against the euro and sterling in over a year due to a dovish Federal Reserve and weak U.S. job market data. Upcoming speeches from Fed Chair Jerome Powell and Bank of Japan's Governor Ueda are highly anticipated for insights on future interest rate policies.
Japan's Nikkei rebounds on softer yen, tech gains
Japan's Nikkei index climbed 1.8%, driven by a softer yen and gains in tech stocks following U.S. economic optimism. Key performers included SoftBank, which rose 3.1%, and Fast Retailing, up 3.6%. Investors remain focused on upcoming remarks by Federal Reserve Chair Jerome Powell for clues on future rate movements.
Fed's Daly says it is time to consider adjusting borrowing costs, FT reports
Mary Daly, President of the San Francisco Federal Reserve Bank, proposed revisiting the current borrowing costs of 5.25% to 5.5%. Daly considered the labor market as slowing yet not weak, and stressed caution in avoiding a downturn. She showed optimism towards achieving a 2% inflation target. Fed Chair Jerome Powell is expected to speak on the economic outlook soon.
Rural economy is driving India's growth, Govt capex in infra will stimulate it: Report
India's rural economy has grown more robust than urban areas, driven by higher government spending. Future growth is anticipated to remain strong, bolstered by capital expenditure plans and good monsoon conditions. The report by Anand Rathi also projected a promising financial outlook and potential credit rating improvements due to strong tax revenues and lower fiscal deficits.
Fitch cuts Israel's credit rating to 'A' as Middle East tensions rise
Fitch downgraded Israel's credit rating to "A" from "A-plus" due to escalating geopolitical risks and prolonged conflict in Gaza. The agency forecasts increased military spending and a worsening budget deficit, potentially reaching 7.8% of GDP in 2024. The outlook remains negative, indicating further downgrades could occur.
RBI may start cutting interest rates from October: Sonal Varma
So, we do think there are some downside risks that are building up over the medium term, although this is something we will need to monitor more closely. For the RBI more specifically, I think the concern has been on food inflation.
India sees 12% surge in company registrations, 73% jump in LLPs in June
Company registrations in India showed a notable rebound in June, marking a 12% increase compared to the previous year, according to data from the corporate affairs ministry. Limited liability partnerships (LLPs) also surged by 73% year-on-year in June, contributing to the overall growth in business formations. Experts attribute this resurgence to a positive economic outlook, relaxed investment rules, and government initiatives aimed at improving ease of doing business. The robust growth reflects confidence in India's growth potential and economic resilience post-pandemic, despite initial moderation earlier in the fiscal year.
Fitch raises FY25 India GDP growth forecast to 7.2 per cent
In its Global Economic Outlook (GEO) released Monday, it raised its forecast for world growth in 2024 to 2.6% from 2.4% estimated earlier. India's economy grew 8.2% in FY24. "We expect the Indian economy to expand by a strong 7.2% in FY25 (an upward revision of 0.2pp from the March GEO)," Fitch Ratings said, adding that investment will continue to rise but more slowly than in recent quarters, while consumer spending will recover with elevated consumer confidence. Purchasing managers survey data point to continued growth at the start of the current financial year.
Asian earnings growth to outpace US and Europe, India's growth momentum strong: Report
The analysis by CLSA, citing Bloomberg's projections, forecasts that Asian earnings growth will surpass that of the US and Europe for both this year and the next. This positive outlook is in line with the Reserve Bank of India's (RBI) prediction of a robust 7.2 per cent growth rate for India in fiscal year 2025.
India's growth set to get more broad-based, says Morgan Stanley; pegs 6.8% for 2024
India's strong growth, driven by consumer and business spending, is expected to become more broad-based, according to Morgan Stanley. The global investment bank forecasts 6.8% growth in 2024, attributing it to global offshoring, digitalization, and energy transition. Retail inflation is at 4.83%, within RBI's comfort zone. S&P Global Ratings revised its outlook on India to positive, citing robust economic growth and fiscal policies.
Ten yrs on, S&P outlook for India turns 'positive'
S&P Global Ratings has upgraded India's sovereign outlook to 'positive' after 10 years, citing improved public spending quality and expectations of continuity in reforms and fiscal policies. India's rating remains BBB- but could be upgraded if cautious fiscal and monetary policies reduce government debt and interest burden while boosting economic resilience. Finance Minister Nirmala Sitharaman welcomed the upgrade, attributing it to macroeconomic reforms since 2014. Economic Affairs Secretary Ajay Seth expressed confidence in India's economy, highlighting robust growth and improved credit metrics.
Upgrade of India's rating outlook reflects solid growth, promising outlook: Nirmala Sitharaman
Finance Minister Nirmala Sitharaman praised S&P's upgrade of India's rating outlook to positive, citing solid growth and a promising future. She highlighted India's trajectory towards becoming the third-largest economy and achieving Viksit Bharat by 2047. S&P's first positive outlook for India, while retaining the 'BBB-' investment grade, reflects successful macroeconomic reforms since 2014, substantial capital expenditure, fiscal discipline, and visionary leadership. Sitharaman shared these comments in a post on X, emphasizing the significance of this development for India's economic prospects.
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