BLESSED ARE YOU WITH AN ETERNAL AND EVERLASTING SMILE. WISHING A GENEROUS WEEKEND AHEAD.

Macro Economic News 09 May 2020

Resiliency and sustainability are something we are missing amidst the mad rush for growth since industrial revolution. The current coronavirus risks, for the most part, is unravelling deep concerns but we need a new social compact while economic hit exacerbating divergence. Markets should beware this morally hazardous approach to policymaking of central banks repeatedly setting the stage for the next boom and bust cycle, fuelled by growing debt while ironically with no productive use of liquidity, money is going into market speculation driving asset prices. In recent years, the only jobs many unskilled workers could find that weren’t vulnerable to automation and outsourcing involved manual labor, personal contact, and low pay and now, even those havens are being blown apart. The unemployment rate rose to a record as employers shed millions of jobs, evidence of the economic destruction wrought by the coronavirus pandemic. Unemployment is hitting post-war highs. The coronavirus pandemic is exacting an expanding toll on China’s standing in the West, with U.S. and European views on cooperation with Beijing dimming. Trust between US and China, which are edging towards a new type of cold war, has deteriorated during pandemic and is close to lowest point since 1979. The Indian government announced raising its borrowing by over 50 per cent of Budget Estimate during the current fiscal which may lead fiscal deficit during the current fiscal up by 200 basis points. 10-year benchmark bond yields fall to 2009 level, may reverse on higher borrowing plan while Moody believes Indian economy may be in 'deep freeze' and Nomura predicts Indian GDP to contract by 5.2% in FY21, more rate cuts.

FINANCIAL TIMES

[I]  Risk sentiment whistles past an appalling jobs report

[I]  US and China: edging towards a new type of cold war?

[I]  Top of Form

Unemployment in US hits postwar high of 14.7%

[I]  Top of Form

Brexit and coronavirus have prompted drive for improving trade resilience

[I]  Top of Form

Lagarde urges eurozone to launch joint fiscal stimulus

[I]  Top of Form

It’s the end of globalism as we know it (and I feel fine)

[I]  Top of Form

US and China say trade talks on track despite coronavirus tensions

[I]  Too much cash is chasing too few desirable assets

[I]  Top of Form

Markets should beware this morally hazardous approach to policymaking

Top of Form

REUTERS

[I]  Coronavirus inflicts huge U.S. job losses as pandemic breaches White House walls

[I]  India's fuel demand nearly halves in April amid lockdown

[I]  India government sharply increases borrowing, markets watch RBI

[I]  India’s mutual fund inflows fall 47% in April on virus fears

[I]  Argentina's $65 billion debt deadline hits as officials push further talks

[I]  Mexico to unveil economic restart next week after coronavirus lockdown 

[I]  Working women, and especially single moms, are hit hard by coronavirus downturn

BLOOMBERG 

[I]  Drilling Sinks to Record U.S. Low With Oil Sector in Retreat

[I]  U.S. April Jobs Report Was Full of Records -- the Bad Kind

[I]  Trump in ‘No Rush’ on New Relief Bill After 20 Million Jobs Lost

[I]  Fed Slows Treasury Buying Again to $7 Billion a Day Next Week

[I]  Dead, Delayed, Renegotiated: Deals and Fights Over Them Pile Up

WALL STREET JOURNAL

[I]  April Jobs Report Shows Record Unemployment

[I]  Health-Care Workers See Steep Job Losses

[I]  U.S. Budget Deficit Hit $737 Billion in April, CBO Says

[I]  A Bleak Landscape for Lowest Paid Workers

[I]  IRS Reverses Itself, Allows Tax Credit for Benefits Paid to Furloughed Workers

[I]  Demand for Small-Business Loans Cools

[I]  As Pandemic Spreads, Regard for China Recedes in West

[I]  Formal Talks Paused on Next Stimulus Package, Trump Adviser Says

BUSINESS LINE

[I]  Centre to borrow ₹4.20-lakh crore more; fiscal deficit may widen to 5.4%

[I]  Covid-19: Commerce Ministry working on export package

[I]  Global economic outlook worsened since forecast in April, says IMF

[I]  Moody’s slashes India’s GDP growth to `zero' in FY21

[I]  Financial package for infrastructure sector may be announced

[I]  MCA extends timeline for independent directors to register themselves

ECONOMIC TIMES

[I]  Will India do enough to lead new world order?

[I]  India's forex reserves up $1.62 mn at $481.08 bn

[I]  10-year benchmark bond yields fall to 2009 level, may reverse on higher borrowing plan

[I]  Covid alters India's borrowing plan, target now raised to Rs 12L cr

[I]  Indian economy to be in 'deep freeze': Moody’s

[I]  Retail inflation eased to five-month low in April: Poll

BUSINESS STANDARD

[I]  Covid-19: Relief for NRIs, foreign visitors as tax residency rules eased

[I]  State govts likely to raise more money using bonds

[I]  Nomura predicts Indian GDP to contract by 5.2% in FY21, more rate cuts

[I]  Jobs as memory: Don't invite new anarchies on top of that wrought by Covid

[I]  MSME sector's bad loan ratio at 12.5% as of January, shows report

Best Regards, ARBIND

09 May 2020

BLESSING IS YOUR LOVELY HEART AND PRETTY SMILE. WISHING AN AMIABLE DAY AHEAD.

Macro Economic News 08 May 2020

Millions more Americans sought unemployment benefits last week, suggesting layoffs broadened from consumer-facing industries to other segments of the economy and could remain elevated even as many parts of the country start to reopen while Chinese exports rose unexpectedly in April, bucking a pandemic-induced economic slump that has crimped demand and disrupted supply chains world-wide. The overwhelming supply of crude is threatening one of the world’s vital industries and could prolong the economic fallout from the coronavirus. Sweden’s decision not to impose a mandatory national lockdown has drawn global attention. But it turns out the situation here isn’t as different as it might first appear. BoE warns UK set to enter worst recession for 300 years while Paris and The Hague say EU must toughen enforcement of green trade. Nitin Gadkari says that MSME sector in India is on the verge of collapse.

FINANCIAL TIMES

[I]  Most Americans trust governors over Trump on reopening, poll shows

[I]  BoE warns UK set to enter worst recession for 300 years

[I]  Paris and The Hague say EU must toughen enforcement of green trade

[I]  Lagarde says ECB ‘undeterred’ by German court challenge

[I]  Brussels plans new anti-money laundering authority

[I]  China exports rebound in April on new Asian demand

[I]  Crunch time for US tenants and landlords

REUTERS

[I]  After swift virus success, Vietnam sets sights on post-pandemic business

[I]  U.S., China top trade representatives held phone call: China ministry

[I]  Pandemic sets Japan on course for deep recession as spending, services plunge

[I]  Australia's central bank sees economy contracting 6% in 2020

[I]  Dollar eases on defiant economic hopes, negative rates spectre

[I]  Portugal extends contracts, housing tensions intensify during pandemic

[I]  Millions more Americans file for jobless benefits; productivity tanks

[I]  Debt, deadlines and default: Argentina's last-ditch push for $65 billion deal

[I]  Argentina issues $1.76 billion in swap as deadline approaches on debt proposal

BLOOMBERG 

[I]  Market Closures in South Asia Leave ‘Bitter Taste’ for Foreign Funds

[I]  Futures Market Sees Negative U.S. Policy Rate by Early 2021

[I]  India to Take on Offshore Currency Markets Amid Virus Tumult

[I]  Historic Asset Sale at $1 Trillion Fund Gives Norway an Edge

[I]  Argentina to Consider Easing Capital Controls After Debt Deal

[I]  India Firms Are Leaning More on Japan Banks Amid Funding Freeze

[I]  U.S. Consumer Borrowing Falls Most Since 2010 Amid Coronavirus

WALL STREET JOURNAL

[I]  Claims Data Point to Record Wave of Unemployment

[I]  Coronavirus Brings California Mass Unemployment, Huge Budget Hole

[I]  China Counters Coronavirus Crunch With a Surprise Rise in Exports

[I]  Health-Care Leaders Question How Remdesivir Is Being Distributed

[I]  The Glut Drowning the Oil Market

[I]  Sweden Avoided a Coronavirus Lockdown. Its Economy Is Hurting Anyway.

[I]  Newsletter: Jobless Claims, Germany’s Example and China’s Exports

[I]  Tax Deductions Tied to Forgiven Small Business Loans Draw Support

BUSINESS LINE

[I]  With little clarity on future road traffic, NHAI’s asset sale plans take a big hit

[I]  MSME sector is on the verge of collapse, says Nitin Gadkari

[I]  Time ripe for edible oil mission: Industry

[I]  High level Working Group soon between India and Russia

[I]  Tax Dept prescribes 2-year window to resolve disputes through MAP

[I]  Gujarat puts watch on four districts as locusts surface in Rajasthan

[I]  Passenger traffic to witness de-growth in FY2021: ICRA

ECONOMIC TIMES

[I]  A tax breather soon for expats stuck in the eye of India's Covid storm

[I]  Consumer firms are kissing Diwali goodbye

[I]  Covid: Mumbai in dire need of a special action plan

[I]  MSMEs' relief may come with new definition

[I]  UK economy may see biggest crash in 300 yrs

[I]  Corporate bond sales surge on RBI’s liquidity push

[I]  India exports 33.5 lakh tonnes sugar so far in 2019-20 marketing year

[I]  Government to push reforms in sectors with stimulus

BUSINESS STANDARD

[I]  Rural India may drive demand recovery amid Covid-19 crisis

[I]  It's time for concrete revival plan, says SBI chairman

[I]  Govt working on financial package for all sectors amid Covid outbreak

[I]  NHAI asset sale plan to be delayed due to Covid-19 outbreak: CRISIL

[I]  India looks to lure more than 1,000 US firms out of China

[I]  UP exempts biz from all but 3 labour laws for 3 years

MARKETS (08:30 am)

[I]  SGX NIFTY Fut: 9292;  USDINR DGCX: 76.0175;  DJIA Mini: 24127;  FTSE 100 Fut: 5923;  NIKKEI 225 Fut: 20080;  EUR-USD: 1.0849; Crude Oil (WTI): 24.00;  Gold (Spot): 1717

Best Regards, ARBIND

08 May 2020

YOUR SMILE BRINGS CHEER TO EVERYONE AROUND. WISHING A PLEASANT DAY AHEAD.

Macro Economic News 07 May 2020

Germany’s highest court conditionally approved a bond-buying program launched five years ago by the ECB but demanded more information about its economic justification, in a move that could set limits on the bank’s firepower. Strict safety rules, testing and contact tracing enabled the country to do something that has eluded most other major developed economies: keep manufacturing running without suffering major outbreaks. The eurozone economy is expected to suffer a sharp recession this year and only partially recover next year, with the global health emergency likely to send debt levels soaring and deepen divisions in the currency bloc. The nonfarm private sector in the U.S. lost about 20.2 million jobs from March to mid-April as much of the country’s economy ground to a halt during the coronavirus pandemic while BOJ's commercial paper holdings jump nearly 30%. Indian services PMI in April at all-time low of 5.4 whereas Nitin Gadkari assures about public transport resuming soon.

FINANCIAL TIMES

[I]  Brussels warns outbreak threatens eurozone’s stability

[I]  Cycling lanes, wider pavements: How EU cities rethink public transport

[I]  US looks to step up economic action against China

[I]  Putin to ease lockdown despite rise in Covid-19 cases

[I]  German court ruling casts doubt on European monetary policy

[I]  Spain’s parliament votes to extend lockdown powers

REUTERS

[I]  BOJ's commercial paper holdings jump nearly 30% as pandemic pain deepens

[I]  China's exports unexpectedly rise even as coronavirus batters global demand

[I]  Most New Zealand businesses to reopen if restrictions eased next week 

[I]  Virus lockdowns pummel global gas demand, force LNG output cuts

[I]  U.S. private payrolls dive by a record 20.2 million

[I]  Euro zone business activity ground to near-halt in April - PMI

BLOOMBERG 

[I]  U.S. Debt Sales to Hit Record With Deficit Headed to $4 Trillion

[I]  African Banks Find Solace in 12% Bond Yields as Lending Dries Up

[I]  China Considers Dropping Numerical GDP Growth Target for 2020

[I]  Oil Tankers Drag Out Sailing Time With Ports Clogged and Glutted

[I]  Argentina Says It’s Open to New Debt Offers From Creditors

[I]  Chile Holds Key Rate Near Zero to Stem Worst Slump Since 80s

[I]  Brazil Eyes ‘Unusually Large’ Stimulus After Bold Rate Cut

[I]  U.S. to Experience Uneven Retail Recovery, Industry Group Says

WALL STREET JOURNAL

[I]  How Germany Kept Its Factories Open During the Pandemic

[I]  Coronavirus Projected to Send Eurozone Into Steep Recession

[I]  Coronavirus Casts Deep Chill Over U.S.-China Relations

[I]  Treasury to Increase Auction Sizes of Longer-Dated Securities

[I]  U.S. Nonfarm Private Sector Lost 20.2 Million Jobs in April

[I]  ECB Faces Renewed Legal Pressure Over Bond Purchases

BUSINESS LINE

[I]  India’s edible oil imports dropped 34% in April

[I]  Lockdown impact: Services PMI in April at all-time low of 5.4

[I]  Public transport may resume soon: Gadkari

[I]  Sugar mills grappling with low demand, high inventory

ECONOMIC TIMES

[I]  Coming up next: A quarantine facility for country's toxic debt

[I]  India restarts; carmakers show the way

[I]  Migrants return: State govts prepare job opportunities

[I]  Govt to gain Rs 1.6 lakh cr this fiscal from record excise duty hike on petrol, diesel

[I]  EPFO, CMPFO merger on cards

[I]  Govt allows biz to verify monthly GST return through EVC

BUSINESS STANDARD

[I]  Private hospitals get a lifeline from Ayushman Bharat

[I]  SBI to grant moratorium to NBFCs on case-by-case basis amid Covid-19 crisis

[I]  Real estate firms bank on tech tools to generate sales amid lockdown

[I]  Govt working on reforms in sunrise sectors to make India export hub: NITI

[I]  Microfinance institutions on a knife-edge with collections taking a big hit

MARKETS (10:00 am)

[I]  SGX NIFTY Fut: 9225;  USDINR DGCX: 76.2700;  DJIA Mini: 23669;  FTSE 100 Fut: 5851;  NIKKEI 225 Fut: 19660;  EUR-USD: 1.0800; Crude Oil (WTI): 24.18;  Gold (Spot): 1692

Best Regards, ARBIND

07 May 2020

SUBSTANTIAL IS THE SMILE ON THY FACE. WISHING A SIGNIFICANT DAY AHEAD.

Macro Economic News 06 May 2020

The United States and Britain launched formal negotiations on a free trade agreement, vowing to work quickly to seal a deal that could counter the massive drag of the pandemic on trade flows and the two allies' economies. FED officials indicated that the U.S. economy could start to recover in the second half of the year after what is shaping up to be the worst recession in decades, but growth is likely to be slow and uneven. Germany’s highest court conditionally approved a bond-buying program launched five years ago by the ECB but demanded more information about its economic justification, in a move that could set limits on the bank’s firepower. India late on Tuesday increased its taxes and duties on petrol and diesel instead of passing on the benefit of lower crude oil prices to consumers, as the government moves to raise revenues in an economy that ground to a halt in coronavirus crisis. Abhijit Banerjee believes India should put in large enough stimulus package to revive demand while India's unemployment rate soars to 27.11% as per CMIE.

FINANCIAL TIMES

[I]  German court calls on ECB to justify bond-buying programme

[I]  Swiss National Bank’s swollen balance-sheet poses risk to ‘credibility’

[I]  EU industrial supply lines need strengthening, commissioner warns

[I]  Argentina ready to consider ninth sovereign default, says Guzmán

[I]  South Africa’s mass screening helps stem the coronavirus tide

[I]  German court has set a bomb under the EU legal order

[I]  Business suffers from lack of trust in its virus response

REUTERS

[I]  India hikes taxes on petrol, diesel; says consumers will be unaffected

[I]  ECB committed to easy policy even after court ruling

[I]  White House to wind down coronavirus task force as focus shifts to aftermath: Trump

[I]  Fed policymakers see slow, uneven U.S. recovery after coronavirus downturn

[I]  U.S., UK launch trade talks, pledge quick deal as virus ravages global economy

[I]  ECB committed to easy policy even after court ruling

BLOOMBERG 

[I]  Trump Says U.S. Must Reopen Even If More Americans Get Sick, Die

[I]  Defiant ECB Pledges Full Commitment After German Ruling on QE

[I]  Australian Homes Loading Up for Lockdown Sent Retail Soaring

[I]  Most U.K. Firms Can Be Ready to Reopen Days After Lockdown Lifts

[I]  India’s Ailing Credit Market Shows the Limits of Central Bankers

WALL STREET JOURNAL

[I]  U.S. March Trade Deficit Widened as Coronavirus Disruptions Spread

[I]  Tax Deductions Tied to Forgiven Small Business Loans Draw Support

[I]  U.S.-U.K. Trade Talks Open on a Friendly Note

[I]  Lawmakers Question Trump Nominee to Oversee Stimulus

[I]  Why Home Prices Are Rising During the Pandemic

[I]  Services Businesses See Biggest Drop in Activity Since Last Recession

[I]  ECB Faces Renewed Legal Pressure Over Bond Purchases

BUSINESS LINE

[I]  ‘A series of medium-sized packages, calibrated approach needed to revive the economy’

[I]  Chennai MSMEs allege bias in permission given to restart operations

[I]  Kirana stores record steep increase in sales of essentials: Study

[I]  Centre hikes excise duty on petrol and diesel

[I]  Cash-strapped States/UTs increase tax on fuel, liquor

ECONOMIC TIMES

[I]  RBI clears fog on special provisioning

[I]  Sovereign perpetual bonds: An idea whose time has come

[I]  Summer crop sowing in full swing, procurement picks up

[I]  Export sops likely to continue till March 2021

[I]  Govt gives relaxations to taxpayers for GST compliance for filing annual returns and audits

[I]  India should put in large enough stimulus package to revive demand: Abhijit Banerjee

BUSINESS STANDARD

[I]  Private equity players see new business opportunities in post-Covid world

[I]  India set to bring home 250,000 stranded abroad; 64 flights deployed

[I]  Banks park Rs 8.42 trn of surplus funds with RBI, hinting lending pause

[I]  Centre raises excise duty on petrol by Rs 10 per litre, diesel by Rs 13

[I]  India's unemployment rate soars to 27.11% amid Covid-19 crisis: CMIE

MARKETS (09:30 am)

[I]  SGX NIFTY Fut: 9136;  USDINR DGCX: 76.0175;  DJIA Mini: 23755;  FTSE 100 Fut: 5797;  NIKKEI 225 Fut: 19490;  EUR-USD: 1.0835; Crude Oil (WTI): 24.42;  Gold (Spot): 1702

Best Regards, ARBIND

06 May 2020