Be a part of the drive with two locally- manufactures shots. 

Wishing a Healthy Start This Ahead.

-Arbind

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Macro-Economic News 16 Jan 2021

In-person events will be back; that is — mostly — good news for the world. India kicks off the ‘world’s largest’ vaccination campaign with two locally-manufactured shots, this Saturday. 

IMF chief praises India for taking ‘very-decisive’ steps to deal with the pandemic and its economic consequences while CMIE warns that the ageing of India's workforce due to high job loss in the below-40 group is not good for a strong recovery. 

Budget 2021 may bring gross tax revenues back on track in FY22 while CBDT relaxes the requirement of remunerating fund managers of offshore funds. Indian friction with the U.S. rises over the planned purchase of Russian S-400 defense systems. Here, on home turf, either government is not farming or the farmers are not governing, making no headway on the ninth round of talks between them. 

After the holiday slump, activity in several of the world’s largest advanced economies extended its recovery in the second week of January, yet remained significantly lower compared with early December. The U.S. retail sales declined, meanwhile, the U.S. factory sector continues to show promise. Euro-area pain continues and Bloomberg sees the economy contracting 4.1% in the first quarter, after a 1.5% drop in the final three months of 2020. 

The U.K. dropped behind the U.S. as the best international business location; even so, it’s still ahead of other Group-of-Seven countries, with Italy at the bottom of the list.

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 A Smile Changes The World; Wishing a Smiling Day Ahead - Arbind

 

Macro-Economic News 15 Jan 2021

 

Company incorporations grow 20% y-o-y during April-Dec 2020. Indian market-cap crossed its GDP for the first time in over a decade, while Fitch predicts the Indian economy to slow down to 6.5% in the medium term after an initial rebound. India plans to achieve 20% ethanol-blending with gasoline by 2025, five years ahead of its previous target. 

 

After a decline in CPI, WPI also declined in December to 1.22% compared to 1.55% in November 2020. However, Core Inflation (Inflation excluding volatile items such as food and fuel) remained very high, whereas automobile sales registered 14 percent growth in December. 

 

New US jobless claims accelerate to highest since August. Biden urges more than doubling minimum wage to $15 an hour as part of his $1.9 trillion Covid-19 relief plan that includes a wave of new spending as more direct payments to households and an expansion of jobless benefits. 

 

Powell sought to stamp out talk of a premature reduction in the central bank’s massive bond-buying campaign that indicates that the central bank’s easy money policies will remain in place for the foreseeable future. 

 

ECB shifts in stimulus stance as policymakers differed over the scale to pull out of its current crisis with the latest pandemic lockdowns and a likely double-dip recession for the eurozone. Most economists expect that the bond-buying package will be fully used without rising interest rates for at least another two years. The German economy stagnated at the end of last year, probably avoiding a double-dip recession engulfing the euro area.

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Wishing this Delightful Auspicious Occasion Brings Enormous Happiness.

 

Macro-Economic News 14 Jan 2021

Central banks are showing concerns about the rising global leverage, especially debt level. Policymakers are beginning to split over when they may need to start pulling back on their massive monetary stimulus while Lagarde warns against an early tightening of stimulus efforts. Rubin says treasury should substantially boost the maturity of the debt. Commercial and residential rentals have started falling again for London to Sydney while NYC retail rents fall to historic lows.

 

The U.S. federal budget deficit continued to balloon at the end of last year on spending to cushion the pandemic’s economic fallout. Inflation expectations in Europe rise to their highest in over a year while the U.S. consumer-price index rose 0.4%. The U.S. deficit from October through December totaled a record $573 billion, widening 61%, as federal outlays rose 18%, whereas the Beige Book forecasts choppy U.S. economic growth before the fiscal lift. The ECB’s latest projections for economic growth in the euro area are still “very clearly plausible” despite the resurgent coronavirus. 

 

Good news flow for India as CARE lowers Centre’s fiscal deficit projection to 7.8% of GDP. India Inc gets back to office cautiously, even as many MNCs remain shut. RBI report finds Indian Banks to be resilient even if there is a 15% run on deposits. Corporate funding is increasing in promising sectors. New port law is expected to open floodgates for the privatization of operational cargo berths, although surging shipping rates are a new headwind for the global economy. 

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Wishing Happy Harvest

On this very auspicious day, the day for starting the celebration of great harvest and thankfulness to the environment enabling our existence on the earth, I express my gratitude to you, everyone, and everything around.

Resting everything with God and vesting everything in you all, I intend to walk the path forward. Being assured of your blessing, I initiate with a little piece of macro-economic updates.

Best Regards

Arbind

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Macro-Economic News 13 Jan 2021

Economists believe that the economy would continue to need strong government-support while WHO anticipated the world won’t achieve 'herd immunity in 2021' despite Covid-19 vaccines. Thailand govt unveils $7 billion stimuli to counter coronavirus impact. Steep job losses drove up unemployment across the globe that, in some economies, is worse than in 1939. The number of companies facing permanent closure is increasing.

Global debt continues to rise.  2020 debt almost equals global GDP making total debt around 3.7x of global GDP. Biden plans to tackle the $1.6 tn student loan. Global Banks warn of market chaos if a court were to abolish Libor. China is closer to approving its first public REIT to ease-out the debt coinciding with US Muni-Bond trading at Extraordinarily Expensive Valuations.

Germany seeks a global corporate tax deal with the Biden administration. US Dollar and other matured currencies continue to decline while emerging market currencies continue to gain strength. Brighter US growth prospects challenge assumptions about the FED’s next move. The market appears factoring hawkish FED expectations while the EU is on the verge of a double-dip recession and South Korea’s jobless hitting 10-years high.

Indian markets are trading at 40x valuation, pushing SENSEX, a shy closer to 50K. A total of 11 private Indian firms having a combined valuation of nearly a third of the Indian GDP have made it to the list of 500 most valuable companies globally; India ranked 10th on the chart.

Indian retail inflation (Dec) eases to within RBI's 2% to 6% target range on easing vegetable prices, whereas manufacturing and mining pulled down the Industrial growth shrink to 1.9%. Economists believe that it would be too early for arriving on a consensus for direction on policy rate as 2021 may set a litmus test for retail and SME loans despite Indian GDP expecting a real growth in double-digit. India’s Apex Court suspends contentious farm laws and forms a panel for talks.

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