MACRO ECONOMIC NEWS

 Happiness Travels Through Chocolate, Sometimes

Wishing A Chocolaty Day Ahead

 

Best Regards

Arbind

 

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Macro-Economic News 09 Feb 2021

Globally, consumer-led recovery seems passing through a brittle structural challenge, at least what it appears from the Japan wage data that has fallen the most since 2015 and plunging UK consumer spending. Employers remain fearful of profit outlook and taking cautious steps. Economists have been predicting the worst fall, at least since the 2009 financial crisis. The Bank of Japan, during the policy review next month, may take some steps towards further easing for sustainability. 

The peril of easy money has started spiraling - from the inflated asset price to stocks to bonds to real state – affecting almost every consumable goods and services globally. The reduced earning and reduced earning power - a deadly combination - are fueling an uneven recovery in a large number of economies and that seems even rougher in Asia. Japanese households are continuing to hoard cash (withholding spending). China's economic growth outlook remains fragile. The hope of a higher minimum wage in the US is providing some support to consumer spending. The U.S. Junk-Bond drops below 4% for the first time. 

India and the UK are taking decisive steps towards the enhanced trade partnership (ETP). It could potentially lead to a comprehensive Free Trade Agreement (FTA). With rising steel consumption, hopeful India seems confident of keeping borrowing costs below 6 percent during the next fiscal. RBI is buying bonds worth Rs 20,000 Cr via open market operations.

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