A MIRACULOUS MOMENT IS AROUND. WISHING A HAPPY FRIDAY AHEAD.

Macro Economic News 26 Jun 2020

Fed caps bank dividends, bans buybacks through September while U.S. labor market, economy struggle despite reopening of businesses. The number of Americans filing claims for unemployment benefits fell moderately last week as a second wave of layoffs partially offset hiring by businesses reopening, suggesting the labor market could take years to recover from the COVID-19 pandemic. As per a report leadership at the Federal Reserve’s 12 regional banks continues to suffer from a lack of racial, gender and economic diversity. A Government Accountability Office report has found that the $670 billion Paycheck Protection Program faces a significant risk of fraud because of confusing rules and lack of safeguards. The White House is now considering raising levies on wine from the European Union to 100% from 25% citing a lack of progress in negotiations over an Airbus-Boeing dispute. India pushes up cost of fuel to boost revenues whereas NCAER reports that India is expected to grow at 1.3% in the current fiscal. Centre looking at one-time loan restructuring plan for non-MSME businesses and a one-time loan recast for India Inc may come up at RBI board meet while Industry urges MSMEs may need massive restructuring post moratorium.

FINANCIAL TIMES

[I]  Texas puts reopening on hold in face of new outbreak

[I]  Human genetics provides clues about mysteries of coronavirus

[I]  IMF reports $49bn losses at Lebanon central bank as bailout talks drag

[I]  House nears vote to approve statehood for Washington, DC

[I]  ECB seeks to defuse row with German court over bond-buying

[I]  India pushes up cost of fuel to boost revenues

[I]  India holds up Chinese imports after deadly border clash

[I]  EU competition chief urges more cross-border M&A

REUTERS

[I]  India's auto, pharma sectors not ready to wean off China

[I]  New Delhi readies vast quarantine centre as coronavirus cases mount

[I]  U.S. House passes Democratic police reform bill as impasse deepens

[I]  U.S. aviation unions ask Congress for another $32 billion bailout

[I]  Satellites reveal major new gas industry methane leaks 

[I]  Oil firms slam brakes on return-to-work as virus cases soar 

[I]  No breakthrough yet from plodding global recovery outlook: Reuters poll 

[I]  Central banks have thrown many tools at coronavirus. What do they have left? 

[I]  U.S. labor market, economy struggle despite reopening of businesses

BLOOMBERG 

[I]  Fed Caps Bank Dividends, Bans Buybacks Through September

[I]  Venezuela Oil Crisis Deepens With India Refiners Halting Imports

[I]  Top End of Sydney, Melbourne Markets Lead Property Declines

[I]  Bond Bulls Face Reckoning in Thailand as Debt Supply Escalates

[I]  U.K. Policy Risks Pensions Outstripping Wage Growth Through 2022

[I]  Fleeing Chinese Buyers Leave Hong Kong’s Office Market Lifeless

WALL STREET JOURNAL

[I]  U.S. Initial Unemployment Benefits Steady at 1.5 Million in June

[I]  Fed Has Made Little Progress Diversifying Leadership, Report Says

[I]  Small-Business Aid Program Has Significant Fraud Risk, GAO Says

[I]  Battered U.S. Wine Importers Brace for Higher Tariffs

[I]  Fed's George: Unclear What Fed Policy Will Need to Do Next

[I]  Newsletter: New Restrictions, Unexpected Delays

BUSINESS LINE

[I]  Pile-up of Chinese goods at Indian ports: Exporters fear retaliation

[I]  Centre looking at one-time loan restructuring plan for non-MSME businesses

[I]  Exports fall this fiscal may be limited to 10%: FIEO

[I]  Diesel price on fire: Soaring truck rentals pose inflation risk

[I]  Customs move to re-check Chinese imports aimed at plugging “under-valuation”

[I]  Mumbai Port emerges top spot for crew change in India

ECONOMIC TIMES

[I]  EPFO payout of 8.5% unlikely as kitty dips

[I]  Sugar output to rise 12% in 2020-21 season: Trade body

[I]  Loans worth Rs. 738.44 crore for MSMEs sanctioned in Assam

[I]  Slowdown in cash demand: Signs of economic revival

[I]  India plans list of substitute nations for critical imports

[I]  India is expected to grow at 1.3% in the current fiscal: NCAER Report

[I]  Five more sectors may get output-linked incentives

BUSINESS STANDARD

[I]  One-time loan recast for India Inc may come up at Friday's RBI board meet

[I]  Sebi relaxes pricing norms for preferential issues of listed companies

[I]  Delisting spree: Investors in India betting on which companies will be next

[I]  Diesel car models see downhill trend as gap between prices of fuels narrows

[I]  MSMEs may need massive restructuring post moratorium, says industry

[I]  Indian banks' overseas business grows 7.5-43.1% in FY20, shows data

MARKETS (08:30 am)

[I]  SGX NIFTY Fut: 10221;  USDINR DGCX: 75.7400;  DJIA Mini: 25531;  FTSE 100 Fut: 6172;  NIKKEI 225 Fut: 22475;  EUR-USD: 1.1220; Crude Oil (WTI): 39.15  Gold (Spot): 1763

Best Regards, ARBIND

26 Jun 2020

RECALL WHO YOU ARE AND YOU ARE REBORN, THE GAME CHANGES. WISHING A NEW DAY AHEAD.

Macro Economic News 25 Jun 2020

Companies agonize over reopening timetables as covid-19 spreads. Many large businesses are grappling with whether to close, stay open or find some in-between as the number of cases of Covid-19 increases. On the other side countries are facing the urgency of returning to full employment as recessions have contributed to long-run rise in inequality and undoing this one’s effects will be hard. Adding worries to woes, business layoffs remain elevated as weak demand persists after businesses reopened while ILO cautions that migrant workers need support, jobs at home after pandemic disruption. Economists at the International Monetary Fund now say the global economy will contract even more sharply than they expected in estimates released in April, which called for the steepest recession since the Great Depression. IMF slashes its forecasts for the global economy and warns of soaring debt levels. The IMF also downgraded its GDP forecast for 2021 and cautioned that the forecasts are surrounded with unprecedented uncertainty. The United States is expected to contract by 8% this year and Indian economy will contract by 4.5% this fiscal to a historical low. The Trump administration is considering expanding and raising tariffs on food imports from the European Union and U.K., part of a long-running dispute that faults European countries for subsidizing aircraft manufacturer Airbus.

FINANCIAL TIMES

[I]  Spain’s tight budget puts squeeze on coronavirus response

[I]  Air pollution rebounds in Europe’s cities as lockdowns ease

[I]  Trump eases environmental rules during pandemic

[I]  China expands coal plant capacity to boost post-virus economy

[I]  IMF slashes economic outlook and warns of public debt burden

[I]  Brussels signals compromise possible in ‘level playing field’ talks

REUTERS

[I]  U.S. layoffs remain elevated as weak demand persists after businesses reopened

[I]  Oil prices fall further on virus fears, U.S. crude stock build

[I]  U.S. agency prepares for massive staff cuts in blow to legal immigration system

[I]  England goes al fresco to help hospitality sector rebound

[I]  Migrant workers need support, jobs at home after pandemic disruption: ILO

[I]  Oil prices fall further on virus fears, U.S. crude stock build

[I]  Global housing markets ensnared by pandemic's high unemployment: Reuters poll

[I]  France to rein in reduced-time work scheme as covid crisis eases

BLOOMBERG 

[I]  IMF Downgrades, Pandemic Tightens Grip, U.S. Tariffs: Eco Day

[I]  Canada Eyes Longer-Term Debt to Sustain Borrowing Binge

[I]  Funding Markets Becalmed by Fed Turn to a Murky Third Quarter

[I]  Modi Looks Inward to Save Indian Economy as Crisis Bites

[I]  Timing Is Everything for Philippines Rate Cut: Decision Guide

WALL STREET JOURNAL

[I]  Companies Agonize Over Reopening Timetables as Covid-19 Spreads

[I]  The Urgency of Returning to Full Employment

[I]  IMF Downgrades Already-Glum Economic Outlook Due to Coronavirus

[I]  Tale of Quad Cities: Reopening Speed Sets Border Communities on Different Tracks

[I]  Tariffs on European Food Could Expand Under New U.S. Proposal

[I]  IRS to Pay Interest on Late Refunds, Even for Those Who Haven’t Filed Yet

[I]  Newsletter: Signs of Growth, Reasons for Caution

BUSINESS LINE

[I]  IMF scales down growth projection, says Indian economy will contract by 4.5% this fiscal

[I]  Tax saving investment for FY20 can be made till July 31

[I]  Relief for depositors: Ordinance brings cooperative banks under RBI supervision

[I]  Sale of non-essential goods on online platforms picks up

[I]  Cabinet approves participation of private sector in space sector

[I]  Women farmers seek to scale the mandi ‘glass ceiling’

ECONOMIC TIMES

[I]  Maha asks cos to start antibody tests on their staff

[I]  Reverse migration a bane for India? Think again

[I]  India looks inward to save economy as crisis bites

[I]  IMF projects sharp contraction of 4.5% in Indian economy in 2020; a historic low

[I]  India Ratings sees a historic slump in growth due to coronavirus

[I]  View: Time to shift focus from disinvestment to investments

BUSINESS STANDARD

[I]  Govt okays Ordinance to give more teeth to RBI over co-operative banks

[I]  Diesel costlier than petrol for first time in Delhi after 18 hikes in a row

[I]  Industry fears supply chain disruption amid curbs on Chinese imports

[I]  Kharif sowing: Labour shortage in Punjab, abundance in UP amid Covid-19

[I]  Draft e-commerce policy soon, to be stricter on data norms and discount

[I]  Govt approves 2% interest subvention scheme for small Mudra borrowers

[I]  India GDP could contract 5.3% due to coronavirus 'disorder': India Ratings

[I]  RBI pulls up banks, NBFCs for non-transparency in digital loans

MARKETS (09:30 am)

[I]  SGX NIFTY Fut: 10221;  USDINR DGCX: 75.7400;  DJIA Mini: 25262;  FTSE 100 Fut: 6072;  NIKKEI 225 Fut: 22290;  EUR-USD: 1.1242; Crude Oil (WTI): 37.88  Gold (Spot): 1764

Best Regards, ARBIND

25 Jun 2020

DEEP IS THE SOURCE OF COMFORTING TRUST AND ASSURANCE. WISHING A PROMISING DAY AHEAD.

Macro Economic News 24 Jun 2020

Heightened uncertainty in India caused by the coronavirus pandemic has led to a surge in currency in circulation as people hoard cash or park money in accessible deposits to safeguard themselves against salary cuts or job losses. NBFCs are back to raise funds and bond sales by non-bank lenders have nearly doubled in the first quarter of FY21, indicating evident revival of investor confidence in suppliers of crucial credit to last-mile users despite the protracted lockdown. Fitch says that India's farm trade may rebound in second half of 2020 while CMIE highlights of unemployment rate falling to pre-lockdown level. FinMin picks out select indicators and assures that Indian economy is picking up. The global economy is gradually pulling out of its stall as businesses reopen after pandemic-induced lockdowns, with output contracting at a slower pace in the U.S., Europe and Asia this month. The downturn in European business activity slowed markedly in June as restrictions to contain the coronavirus crisis were eased, according to a closely watched survey that added to signs of a recovery in the region’s economy.

FINANCIAL TIMES

[I]  Relaxation of English lockdown ‘not risk-free’, warns chief adviser

[I]  Insurers join World Bank to help small businesses in poorer nations

[I]  Eurozone business downturn slows as virus restrictions ease

[I]  Digital ad market set to eclipse traditional media for first time

[I]  Distressed markets are masters of disguise

[I]  US complaints about global digital taxes should fall on deaf ears

REUTERS

[I]  India says it may allow some foreign flights to resume after U.S. criticism

[I]  India's oil imports in May sink to lowest in over 8 years - trade

[I]  France's Macron, Dutch PM Rutte make progress on EU budget: Elysee

[I]  IMF, Sudan reach agreement on macroeconomic policies structural reforms

[I]  India money supply surge signals pandemic-related uncertainty, not growth

[I]  India levies charge on some steel imports from China, Korea, Vietnam

BLOOMBERG 

[I]  China’s Growing Dollar Bond Defaults Reveal Depth of Stress

[I]  Junk Bonds Topple Monthly Sales Record in ‘Party Like No Other’

[I]  Crypto Market Stuck in Negative Trend With Bitcoin Below $10,000

[I]  U.K. Mall Landlords Expect Worst as $3.1 Billion Rent Comes Due

WALL STREET JOURNAL

[I]  Global Economy Shows Signs of Pulling Out of Its Slump

[I]  Coronavirus Job and Death Toll Is Widespread in Michigan

[I]  Lawmakers Ask Fed to Help Businesses Struggling to Make Mortgage Payments

[I]  Delivery Firm Got PPP Loan Even as Demand Rose During Pandemic

[I]  Job Recruitment Adopts Social Distancing

[I]  Newsletter: Raw Materials Rally Signals Quicker Recovery

BUSINESS LINE

[I]  Pick-up in discretionary spending unlikely as long as Covid uncertainty persists: CEA

[I]  Pharma exports up 19% in May

[I]  Shift in renewable energy strategy: Move towards peak, on-demand robust power supply

[I]  Trump move on non-immigrant visas may not hit Indian IT firms hard

[I]  India begins anti-dumping probe into aluminium foil imports

[I]  India could allow limited international flights with some countries

ECONOMIC TIMES

[I]  The danger of being an Indian HNI

[I]  India money supply surge signals pandemic-related uncertainty, not growth

[I]  NBFCs are back to raise funds, double bond sales

[I]  India's farm trade may rebound in second half of 2020: Fitch Solutions

[I]  Government to curb pharma imports from China

[I]  Unemployment rate falls to pre-lockdown level: CMIE

[I]  Inequality gap in India to narrow down post COVID-19: SBI report

BUSINESS STANDARD

[I]  No, thanks: Mobile device makers say to DoT on source code demand

[I]  US-India to create green corridor for resumption of international flights

[I]  Economy is picking up, says FinMin as it gives out select indicators

[I]  Sebi lays down operational framework for transactions in default debt

[I]  Petrol, diesel price gap narrows to just 36 paise; consumption picks up

[I]  Toll collection on recovery path as Gadkari looks at higher share of PPP

MARKETS (09:30 am)

[I]  SGX NIFTY Fut: 10487;  USDINR DGCX: 75.6525;  DJIA Mini: 26021;  FTSE 100 Fut: 6249;  NIKKEI 225 Fut: 22538;  EUR-USD: 1.1315; Crude Oil (WTI): 40.46  Gold (Spot): 1768

Best Regards, ARBIND

24 Jun 2020

OBSERVE THE COMFORT OF CARING COMPASSION. WISHING A LOVING DAY AHEAD.

Macro Economic News 23 Jun 2020

The European Union told China to make good on a promise to open up its economy and warned of "very negative consequences" if Beijing goes ahead with a new security law on Hong Kong that the West says will curtail basic rights. In the post-pandemic world, more economic activity will be designated vital to national security, accelerating pressures on globalization that existed before Covid-19 arrived. A funny thing has happened to the Federal Reserve’s overall holdings of bonds, cash and other assets: It just contracted even as central bank officials are still pledging a pedal-to-the-metal effort to keep the U.S. economy afloat during the coronavirus pandemic. Sales of previously owned homes dropped 9.7% in May from the prior month, as the coronavirus pandemic kept US shoppers indoors during the typically busy spring home-buying season. Japan rushes UK to agree first post-Brexit trade deal whereas Beige Book says China is in recession and heading for full-year decline.

Moody opines that global economy faces long, bumpy recovery and predicts India's GDP contracting 3.1% in 2020 whereas Fitch expects that India is very likely to announce another set of fiscal stimulus measures. MCA again extends timeline for creation of a deposit repayment reserve by 3 months while lending to real estate in India declined by 46% in FY20.

FINANCIAL TIMES

[I]  Japan rushes UK to agree first post-Brexit trade deal

[I]  Australian miners’ climate plan attacked over lack of targets

[I]  France shows Europe can keep Covid-19 in check after reopening

[I]  Berlin and ECB signal end to legal impasse over bond-buying

[I]  Putin aims for patriotic boost from victory parades

[I]  US Supreme Court limits SEC’s power to recover ill-gotten gains

[I]  Digital ad market set to eclipse old media for first time

REUTERS

[I]  Trump suspends entry of certain foreign workers despite business opposition

[I]  India's top court rejects power companies' bid to extend emissions deadline

[I]  U.S. accuses India of unfair practices on charter flights

[I]  Trump says 'China trade deal is fully intact'

[I]  Indian refiners crude processing in May recovers, up 7.3% from April 

[I]  EU presses China over trade, warns on Hong Kong law

[I]  U.S. home sales hit 9-1/2-year low; price growth cools

[I]  UK factories suffer worst quarter on record, CBI says

BLOOMBERG 

[I]  ‘Everything Is Expensive’ as Global Stock Valuation Debate Rages

[I]  China’s Economy Will Resume Growth This Quarter, Economists Say

[I]  India Insurers Boost Cash, Stress Test Stocks on Market Swings

[I]  Central Bank Reserves Can't Be Taken for Granted

[I]  India’s Own Version of Yield Curve Control Seen Already in Play

[I]  China in Recession and Heading for Full-Year Decline: Beige Book

WALL STREET JOURNAL

[I]  Job Recruitment Adopts Social Distancing

[I]  Economy Week Ahead: Housing, Factories and Consumer Spending

[I]  How the Coronavirus Will Reshape World Trade

[I]  Derby’s Take: Making Sense of a Contraction in the Fed’s Balance Sheet

[I]  May U.S. Home Sales Dropped 9.7%

BUSINESS LINE

[I]  Kerala becomes the first State to adopt second level verification for new GST registrations

[I]  Softening the Covid blow: MCA again extends timeline for creation of a deposit repayment reserve by 3 months

[I]  Covid-19 impact: As start-ups attempt to tide over cash crunch, valuations take a hit

[I]  Global economy faces long, bumpy recovery post Covid: Moody’s

[I]  Monsoon back with a bang in South; bides time in North

ECONOMIC TIMES

[I]  Donald Trump just suspended the Indian techie's favourite visa

[I]  Economic recovery won't be as 'V' expected

[I]  Can India become the world's big factory?

[I]  Mumbai's realty isn't immune to coronavirus

[I]  Large corporations hold back Rs 3.3 lakh crore payment to MSMEs: Study

[I]  India 'fast moving' economy, progressively taking steps to deepen trade ties: Australian trade minister

[I]  India's GDP to contract 3.1% in 2020: Moody's

[I]  India very likely to announce another set of fiscal stimulus measures: Fitch

BUSINESS STANDARD

[I]  Unlock 1.0: Essential shopping rebounds fastest to pre-lockdown levels

[I]  Galwan Valley clash: Govt plans to cap China FPI investments at 5%

[I]  China investment proposals on hold, not scrapped yet: Maharashtra minister

[I]  Lending to real estate in India declined by 46% in FY20, shows data

[I]  Bank deposits grow at 11.3% but credit growth moderates, shows data

MARKETS (08:30 am)

[I]  SGX NIFTY Fut: 10351;  USDINR DGCX: 76.0275;  DJIA Mini: 25956;  FTSE 100 Fut: 6233;  NIKKEI 225 Fut: 22622;  EUR-USD: 1.1273; Crude Oil (WTI): 40.46  Gold (Spot): 1751

Best Regards, ARBIND

23 Jun 2020