LET THE RAY OF HOPE ENLIGHTEN OUR INNER BEAUTY TO SPREAD ABUNDANCE OF TRUST TO EVERYONE. WISHING A DIVINE WEEKEND AHEAD.

Macro Economic News 21 Dec 2019

 

The World is days away from booking the best asset returns in a decade as consumers boosted spending buoyed by a rise in income and an optimistic outlook for the U.S. economy however, Moody’s warns on frothy US junk bond market. The German institute of economic research (DIW) expresses likely contraction of German economy in fourth quarter while Argentina is delaying payments on $9bn in its public debt. PM Boris Johnson won approval for his Brexit deal in parliament, the first step towards Britain's departure from the European Union by Jan. 31. PM Modi assures that India will emerge stronger from economic slowdown; however, IMF says economic revival is unlikely soon while Fitch has cut India's GDP growth to 4.6% as credit crunch cripples economy. IMF’s Gita Gopinath warns that India must stick to fiscal consolidation in medium-term along with policy certainty and structural reforms while Fitch highlights, India's growth outlook is still strong compared to peers. PM has encouraged India Inc. of making bold investment decisions to push up growth while assuring banks and India Inc about no inappropriate action on genuine commercial decisions whereas Nitin Gadkari invites them to set up industries along Delhi-Mumbai expressway and FM Sitharaman expressed intention the Govt. does not want businesses to shut rather will help them revive. India's appetite for petroleum products consumption is expected to drop to 6-year low while, as per RBI report, India's import cover had improved to 10 months in June 2019. India's volatile food prices are yet again posing a sticky inflation problem for its central bank, preventing it from cutting rates as deep as it would like to support a stuttering economy. in the meantime, Rupee bond yields fall after RBI brings in India's version of 'Operation Twist' where 10-year yield sees biggest fall in 10 weeks.

 

FINANCIAL TIMES

[I]  Johnson clears path for Brexit with draft bill victory

[I]  Argentina delays payments on $9bn in debt

[I]  Sweden worries it created a negative-rates monster

[I]  Ukraine and Russia sign deal on gas supply to Europe

[I]  Moody’s warns on frothy US junk bond market

 

REUTERS

[I]  India will emerge stronger from economic slowdown, Modi says

[I]  India's elevated food inflation limits scope for further rate cuts

[I]  Veteran watchdog Bailey to guide Bank of England through Brexit

[I]  UK on track for Jan. 31 Brexit as PM Johnson wins vote on deal

[I]  U.S. consumers put economy on moderate growth path in third quarter 

[I]  German economy likely to contract in fourth quarter, DIW says 

[I]  Gold demand tepid in major Asian hubs, protests in India curb buying

 

BLOOMBERG 

[I]  The World Is Days Away From Booking the Best Asset Returns in a Decade

[I]  ‘Unstoppable’ Global M&A Faces Slower 2020 on Markets, Politics

[I]  BofA CEO Says Leveraged-Loan Stress Could Ripple Through Economy

[I]  Going 100% Green Will Pay For Itself in Seven Years, Study Finds

[I]  The 2020 Outlook for Euro Interest Rate Volatility

[I]  U.S. Consumption, Incomes Pick Up in Sign of Holiday Cheer

[I]  Long-Term Inflation Expectations Hit Record Low in Michigan Consumer Survey

[I]  Consumer-Spending Bump Offset by Inventories in Revised U.S. GDP

 

WALL STREET JOURNAL

[I]  Consumer Spending Strengthens as Year Winds Down

[I]  When Congress Buys Time to Finish a Budget, the Price Is Uncertainty

[I]  With Brexit Looming, U.K. Picks Veteran as Central Bank Chief

[I]  U.S. Home Sales Pick Up in Second Half of Year

[I]  House Passes North American Trade Pact With Bipartisan Support

[I]  Uber, Lyft Marshal Forces Over California Law on Gig Workers

 

BUSINESS LINE

[I]  PM to banks, India Inc: no inappropriate action on genuine commercial decisions

[I]  Three proposals get automatic nod under CCI green channel

[I]  Yield improvement need of the hour for cotton sector, says apex trade body

[I]  Policy certainty, structural reforms are key to growth: IMF’s Gita Gopinath

[I]  Set up industries along Delhi-Mumbai expressway: Gadkari

[I]  Spike in food inflation limits scope for further rate cuts

 

ECONOMIC TIMES

[I]  Fitch lowers India's growth to 4.6% in FY20

[I]  Forex reserve scales fresh record high at $454.49 billion

[I]  Rupee, bond yields fall after RBI brings in India's version of 'Operation Twist'

[I]  Operation Twist: 10-year yield sees biggest fall in 10 weeks

[I]  Economic revival unlikely soon: International Monetary Fund

[I]  India's growth outlook still strong compared to peers: Fitch

 

BUSINESS STANDARD

[I]  India Inc should make bold investment decisions to push up growth: PM Modi

[I]  Do not want businesses to shut, will help revive: Sitharaman to India Inc

[I]  India's appetite for petroleum products consumption to drop to 6-year low

[I]  India's import cover improves to 10 months in June 2019, says RBI report

[I]  Govt plans to take khadi turnover to Rs 2 trn in next 5 years: Gadkari

[I]  Fitch cuts India's GDP growth to 4.6% as credit crunch cripples economy

[I]  India must stick to fiscal consolidation in medium-term, says Gita Gopinath

 

Best Regards, ARBIND

21 Dec 2019

THE LIFE IS JUST THE COMFORTING MIX OF TENDER FLAKES, GENTLE SNOW AND ICE ROCKS. WISHING A CALMING DAY AHEAD.

Macro Economic News 20 Dec 2019

 

Prime Minister Boris Johnson unveiled what he called a radical government agenda, setting his sights on a quick Brexit, future trade deals and on transforming Britain. The U.S. expansion, now in its 11th year, will continue through the 2020 presidential election with a healthy labor market backing it up, economists say. U.S. home sales are picking up in the second half of the year, a sign that low mortgage rates and a solid economy are helping to heat up the once-sluggish housing market going into next year. Sweden’s central bank, one of the first to wield negative interest rates, has ended that policy, a move closely watched by other institutions that have resorted to what was supposed to be a radical and short-lived measure. Mexico cuts its key rate for fourth time after inflation slows while Japan's consumer inflation ticks up as shoppers pay more for sushi, ice cream. German Finance ministry expects its subdued exports in coming months while Reuters poll find global outlook to remain sombre for late-cycle expansion despite market joy. World Bank warns on $55tn emerging market debt pile whereas corporate India has pitched for “uniformity” in the corporate tax rate, stating that a rate of 22 per cent for existing firms and 15 per cent for new manufacturing firms creates “inequality”.

 

FINANCIAL TIMES

[I]  World Bank warns on $55tn emerging market debt pile

[I]  Putin hints at constitution change for presidential terms

[I]  EU’s new economy chief warns on bloc’s budget rules

[I]  BoE sticks to forecast of post-election growth rebound

[I]  Sweden ends negative rates regime over side-effects concern

[I]  N Koreans in China and Russia look set to defy sanctions

 

REUTERS

[I]  RBI sees room for rate cuts, await clarity on inflation, minutes show

[I]  U.S. House passes new North American trade deal, Senate timing unclear

[I]  U.S. makes it easier for holders of industry-standard patents to block product sales

[I]  Japan's consumer inflation ticks up as shoppers pay more for sushi, ice cream

[I]  With a 'radical' agenda, Johnson sets sights on quick Brexit

[I]  U.S. deports Mexicans far from border, may send others to Guatemala

[I]  U.S.-China to sign 'Phase one' trade pact in early January -Mnuchin

[I]  Global outlook somber for late-cycle expansion despite market joy - Reuters poll 

[I]  German exports to remain subdued in coming months - Finance Ministry 

[I]  U.S. labour market on solid ground; mid-Atlantic factories sputter

 

BLOOMBERG 

[I]  U.S. Existing-Home Sales Fall to 5-Month Low on Lean Inventories

[I]  Mexico Cuts Key Rate for Fourth Time After Inflation Slows

[I]  Fed Says Banks Cite Regulations Among Reasons for Repo Spike

[I]  Southeast Asia May Soon Need a ‘Plan B’ to Deal With Lowflation

[I]  U.K. Consumers, Firms End 2019 on Upbeat Note as Sentiment Jumps

[I]  Economists Boost China Outlook on Trade Deal, Survey Shows

[I]  It’s Crunch Time for Indian States’ Finances as Economy Slows

[I]  Argentina Asks Pimco to Roll Over Debt as Restructuring Looms

 

WALL STREET JOURNAL

[I]  U.S. Home Sales Pick Up in Second Half of Year

[I]  Fed's Bullard Sees No Reason Now to Change Rates in 2020

[I]  House Passes North American Trade Pact With Bipartisan Support

[I]  A Pioneer of Negative Rates Pauses the Experiment

[I]  Japan’s Economy Faces Another Rocky Year

[I]  Traders Got Head Start on Bank of England News Conferences

[I]  U.S. Expansion Expected to Continue Through 2020 - WSJ Survey

 

BUSINESS LINE

[I]  At pre-Budget meet, India Inc seeks a single corporate tax rate of 15% over three years

[I]  Room for strong growth for microfinance in India: KPMG

[I]  Need for National Tourism Policy, suggests CII

[I]  Air passenger traffic to drop to 6-year low in 2020: ICRA

[I]  Poor demand, weak prices hit farm exports in April-October

[I]  December wheat stocks hit 7-year high on poor offtake; may pose storage challenge

[I]  US wants India to lower its tariffs

 

ECONOMIC TIMES

[I]  What India Inc wants from Budget 2020

[I]  After onions, potato prices on fire, jump 75% in Delhi

[I]  Bengaluru highest paying city, IT highest paying industry in India: Report

[I]  Govt begins industry consultations

[I]  GST compensation to 9 states put at Rs 70,000 Cr

[I]  India Inc seeks steps to stimulate consumption, revive investment

[I]  Government plans law to reposition stats body

 

BUSINESS STANDARD

[I]  Business fears hit to cash flow from new GST input tax credit restriction

[I]  Govt plans to implement all four labour codes in one go, likely in 2020

[I]  India Inc wants Centre to take more steps on ease of doing business

[I]  Govt's bid to provide employment via MSME jobs portal fails to take off

[I]  Puzzled why stock market is buoyant amidst slowdown: Arvind Subramanian

 

MARKETS (08:30 am)

[I]  SGX NIFTY Fut: 12280;  USDINR DGCX: 71.2300;  DJIA Mini: 28398;  FTSE 100 Fut: 7572;  NIKKEI 225 Fut: 23770;  EUR-USD: 1.1115; Crude Oil (WTI): 61.09;  Gold (Spot): 1478

 

Best Regards, ARBIND
20 Dec 2019

SOMETIMES WE ONLY NEED TO FEEL AROUND US WITH THE COMFORT OF FOG AND MIST OF LIFE. WISHING A RELIEVING DAY AHEAD.

Macro Economic News 19 Dec 2019

 

In historic step, U.S. House impeaches Donald Trump for abuse of power, obstruction. Now he will be trailed in the US Senate which would need two-third votes to oust him of power. The U.S. expansion, now in its 11th year, will continue through the 2020 presidential election with a healthy labor market backing it up, economists say, although the US Congress can’t seem to drive a stake through the heart of what some have called “zombie” incentives. FED’s John Williams expects the U.S. economy to maintain its good performance in 2020 and sees a supportive central-bank policy to help achieve that outlook whereas Canadian inflation accelerates on higher energy prices. Brussels warns UK over risk from lack of trade deal while ECB urged to end secrecy over policy votes. German business confidence rises at end of rocky year whereas Sweden grapples with housing market reform as risks mount. BOJ may warn of soft output keeping policy steady on easing trade tensions. Indian Government approves Rs 436 crore outlay for skilling 4 lakh persons and GST Council fixes 28% uniform rate for lottery. NITI Aayog plans to bring all medical devices under one regulatory regime. States demand to relax fiscal deficit limit from 3% to 4% of GDP while the fiscal deficit for April-November likely stood at 107% of FY20 target. Former CEA , Arvind Subramanian says that the economy is confronted with ‘four balance sheet’ challenge.

 

FINANCIAL TIMES

[I]  Brussels warns UK over risk from lack of trade deal

[I]  Macron seeks to end strikes with pensions compromise

[I]  ECB urged to end secrecy over policy votes 

[I]  German business confidence rises at end of rocky year

[I]  Canadian inflation accelerates on higher energy prices

 

REUTERS

[I]  India plans bio-gas plants to tackle toxic pollution, but experts sceptical

[I]  BOJ to keep policy steady on easing trade tensions, may warn of soft output

[I]  In historic step, U.S. House impeaches Donald Trump for abuse of power, obstruction

[I]  Australia must respect China if relations are to improve - Chinese envoy

[I]  Sweden grapples with housing market reform as risks mount

[I]  Strong German business morale signals modest growth in fourth quarter - Ifo

 

BLOOMBERG 

[I]  Trump Impeached on Two Counts by House, Setting Up Senate Trial

[I]  New Zealand Economic Growth Accelerated in Third Quarter

[I]  BOE to Hold Fire as Bets on 2020 Cut Grow: Decision Day Guide

[I]  China Adds Most Cash in Open Market Operations Since January

[I]  Australian Unemployment Unexpectedly Falls; Currency Gains

[I]  Roughed Up India Bonds Greet 2020 With Hope

[I]  Muller Says ECB Review Should Start With Inflation Deep Dive

 

WALL STREET JOURNAL

[I]  U.S. Expansion Expected to Continue Through 2020 - WSJ Survey

[I]  The Demographic Threat to America’s Jobs Boom

[I]  China’s Farm-Purchase Targets Under Trade Deal Face Skeptics

[I]  Why Congress Just Can’t Kill ‘Zombie’ Tax Breaks

[I]  New York Fed’s Williams Says Rates in Right Place

[I]  China’s Growing Power, and a Growing Backlash

 

BUSINESS LINE

[I]  Indian economy is facing a Great Slowdown

[I]  Over 40% of Ujjwala beneficiaries not vetted for duplication: CAG

[I]  GST Council fixes 28% uniform rate for lottery

[I]  Land records in 90% of Indian villages have been computerised

[I]  December wheat stocks hit 7-year high on poor offtake; may pose storage challenge

[I]  Sugar production down 35% till December 15: ISMA

 

ECONOMIC TIMES

[I]  Consumers will be back soon, say FMCG companies

[I]  Era of low sovereign bond yields to persist well into 2020: Poll

[I]  Higher wholesale prices, strong reservoir levels to help farmers in FY20

[I]  9 major trends reshaping the world economy

[I]  Govt imposes restrictions on import of gold, silver

[I]  Government approves Rs 436 crore outlay for skilling 4 lakh persons

[I]  Fiscal prudence is important but growth will take precedence: Sources, Ministry of Finance

 

BUSINESS STANDARD

[I]  FMCGs turning attention on premium, small packs as spending curbs grow

[I]  As UPI gears up for global markets, Indian fintechs smell opportunity

[I]  Panel flags Rs 63,000-crore compensation cess shortfall in 2019-20

[I]  NITI Aayog plans to bring all medical devices under one regulatory regime

[I]  Relax fiscal deficit limit from 3% to 4% of GDP, states ask Sitharaman

[I]  Fiscal deficit for April-November likely stood at 107% of FY20 target

 

MARKETS (08:30 am)

[I]  SGX NIFTY Fut: 12219;  USDINR DGCX: 71.0925;  DJIA Mini: 28258;  FTSE 100 Fut: 7553;  NIKKEI 225 Fut: 23780;  EUR-USD: 1.1128; Crude Oil (WTI): 60.89;  Gold (Spot): 1478

 

Best Regards, ARBIND
19 Dec 2019