MACRO ECONOMIC NEWS

 May The Wisdom Walk Our Way From Darkness To Light

Wishing A Happy Basant Panchami

 

Best Regards

Arbind

 

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Macro-Economic News 16 Feb 2021

 

The rising assurance from governments that translates into the expansion of balance sheets of its central banks and financial institutions often narrows the credit spread and widens the gap between the actual risk and perceived risk. Such markets are heaven for the “Risk Arbitrage.” Currently, risky borrowers are occupying the largest share of junk bond deals since the last market meltdown. Although, yield, yield spread, and yield structure are a long way off to cause any harm to economic recovery.

The Reserve Bank of Australia foresees the need for ‘very significant’ monetary support for some time now. RBA emphasized, “it would be premature to consider withdrawing monetary stimulus.” It is precisely in line with other advanced economies extending supportive hands with hands-full with cash, credit, and credentials. Although central banks, including RBA as it mentions in its recent minutes, are aware of risks – hunting for yields, Currency premiums, leveraged asset price, possible bubbles, housing market imbalances – and are keeping a close watch on them.

Indian wholesale price inflation rose to more than two percent in January. Ind-Ra expects states' fiscal deficit to narrow to a comfortable 4.3 percent of GDP in 2021-22. Nomura expects the economy to revert to its normalcy with a 13.5% growth rate in the same period.

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