China tightens monetary policy

SHANGHAI: China's central bank (pic) said on Saturday it had signed an agreement with the Bank for International Settlements to establish a Renminbi Liquidity Arrangement (RMBLA) that will provide support to participating central banks in times of market fluctuations. The People's Bank of China (PBOC) said the arrangement's first participants, in addition to the PBOC, would include the Central Bank of Malaysia (Bank Negara), Bank Indonesia, the Hong Kong Monetary Authority, the Monetary Authority of Singapore and the Central Bank of Chile. Each participant will contribute a minimum of 15 billion yuan ($2.2 billion) or the U.S. dollar equivalent, it said. The BIS said in a separate statement that the funds could be contributed either in yuan or U.S. dollars, and that they would be placed with the BIS, creating a reserve pool. ($1 = 6.6878 Chinese yuan renminbi) - Reuters … [Read more...] about China’s central bank renminbi liquidity arrangement includes Malaysia

BEIJING (Xinhua): China's central bank has ramped up support for renminbi settlement in new forms and models of foreign trade to better serve the real economy and facilitate trade and investment. In a recent circular, the People's Bank of China improved policies for cross-border renminbi business in e-commerce and other new models of foreign trade. The business scope of payment institutions will be expanded from goods and services trade to current accounts, and risk prevention and control will be strengthened with clear requirements for authenticity verification and anti-money laundering work, among other issues. Effective July 21, the new policies will provide better financial services for trade companies, guide the healthy development of new trade models, and help stabilize the economy, according to the central bank. Apart from e-commerce, new forms and models of foreign trade also include market procurement, offshore trade, and overseas warehouses. China has stepped up … [Read more...] about China backs renminbi settlement in new models of foreign trade

The Reserve Bank of India (RBI) headquarters, center, in Mumbai, India, on Saturday, Feb. 5, 2022. Investment activity is thus expected to strengthen, driven by rising capacity utilisation, government’s capex push and deleveraged corporate balance sheets. Manish Banthia The monetary policy for the last two years was largely crisis management given the pandemic times. However, post 2021, as growth started to recover, it was required for the Reserve Bank of India to normalize interest rates. Given that fiscal support in India was not as large in comparison to the US, the recovery seen in India was gradual. With the crisis behind us now, it is imperative we move to a more neutral stance in terms of... … [Read more...] about RBI will take interest rates to a neutral zone and stop there

(Representative image: Reuters) Dear Reader, A whiff of change wafted through the markets this week. The focus shifted from worrying over inflation to concerns about growth. The advance Purchasing Managers Indices (PMIs) for the current month for the US and the Eurozone showed slowing growth, but while they indicated inflation was cooling in the US, it continued to rise relentlessly in the Eurozone. They also reflected stalling demand and falling business confidence. The New York Fed’s economic model predicted an 80 percent chance of a hard landing for the US. UK consumer confidence hit a record low. In China, housing starts and property transactions reached extreme lows. The worries over an imminent recession in the US, the UK and the Eurozone sent commodity prices sharply lower. Copper prices have moved down dramatically. My colleague Ravi Ananthanarayanan wrote about the dark clouds hovering over steel . Crude oil prices too fell. That dissipated some of the … [Read more...] about MC Pro Weekender | A new narrative

Share to Twitter Share to Linkedin There was a time when the Group of Seven (G7), the assembly of wealthy nations, was consigned to the footnote of global governance. This was in the aftermath of the 2008 global financial crisis when a larger peer group, the G20, became all powerful as the policy coordinator for the global economy. The tide has turned since Russia’s invasion of Ukraine, unsettling and reordering the nodes of geopolitics. As G7 leaders gather early next week in the Bavarian Alps for their annual summit, it is no exaggeration to note that decisions taken at the Schloss Elmau resort will have far-reaching implications for the global economy. To be sure, the G20 has not disappeared as the primary platform for global economic policy. Russia’s invasion, however, has exposed the group as being sharply divided. Large emerging countries, China notably, but also India, Brazil, South Africa, and Indonesia have taken a neutral position on the … [Read more...] about The Rise Of The G7 And The Decoupling Of Global Governance

(Representative image: Shutterstock) We need to look at India’s presence in the forthcoming G7 summit on June 26-27 beyond the positive hypes and negative hopes set by domestic constituencies and global narrative peddlers. On its own, there is nothing exclusive about this invitation. Apart from India, the German presidency has invited Argentina, Indonesia, Senegal, and South Africa to the summit to be held at Schloss Elmau, Bavaria. Yet, if some folks take Western pressures seriously (we don’t), India is expected to be on the back foot because it did not toe the G7 line and stood its own on the Russia-Ukraine conflict. The dominant narrative today is that India needs to be punished. So far gone are these voices that global news agencies have forgotten basic journalism. They are mixing wishful thinking with facts, using the convenience of unnamed sources as cover. When they report that “ Germany is debating whether to invite Prime Minister Narendra Modi to the Group of … [Read more...] about India At G7 | Expectations from and support for India will rise rather than fall

Trade Watchlist Portfolio Message Set Alert live bse live nse live Volume Todays L/H More × CD Equisearch's research report on Vinati Organics As per Crisil Research, the Indian specialty chemicals industry is expected to outpace its Chinese counterpart and almost double its global market share to ~6% by 2026. Much of this growth will be powered by solid export tailwinds due to a shift in the global supply chain driven by the China+1 policy of vendors and demand recovery in domestic end-user segments. Currently, the industry is confronted with a sharp rise in input costs, including fuel costs, and facing logistical challenges emerging from China. Beyond the ‘Chine plus one’ opportunity within agrochemical and pharmaceutical manufacturing, tailwinds from the imminent investment cycle in e-mobility, batteries, and renewables have further expanded the total addressable market that has … [Read more...] about Accumulate Vinati Organics; target of Rs 1983: CD Equisearch

The rise in profits/GDP ratio may provide the incentive for a revival of capex growth in the private corporate sector The ratio of corporate profits of the companies that make up the Nifty 500 to GDP is at its highest level since FY2012. The accompanying chart, sourced from Motilal Oswal research, shows the trend. There is, however, one big difference between the peak of corporate profits/ GDP in FY 2008 and in FY 2022. In FY 2008, when the corporate profits/GDP of the Nifty 500 surged to 5.1 percent, the public sector contributed 2.1 percentage points. In 2022, the public... … [Read more...] about The decade high profits-GDP ratio in 2022 has been powered by the private sector

Share to Twitter Share to Linkedin Stocks continued their descent last week, with the S&P 500 now well into bear market territory at -23% from the high. While most define bear markets as a decline of 20% from the high, some pullbacks just kiss that level or don’t result in widespread carnage across all sectors. What we saw last week certainly qualifies the current situation as a “real” bear market. First, the S&P 500 was down almost 11% during the previous two weeks. Secondly, all sectors participated in the sell-off. Whether it is “profit-taking” or “selling what you can rather than what you want to,” this indiscriminate liquidation is the hallmark of a bear market. For example, energy stocks, which had been almost impervious to the market weakness this year, declined 17% last week! That still leaves energy up 31% and the only sector in the green year-to-date. Utilities, which were only slightly lower before last week, underperformed the market over … [Read more...] about Welcome To The Real Bear Market

US President Joe Biden (right) being greeted by Bavaria Prime Minister Markus Soeder (centre) upon arriving at Munich Airport on June 25, 2022 ahead of the Group of Seven summit in Munich, Germany. - A + A SCHLOSS ELMAU (June 26): German Chancellor Olaf Scholz is set to welcome leaders of the Group of Seven (G7) rich democracies on Sunday to a three-day summit in the Bavarian Alps overshadowed by the war in Ukraine and its far-reaching consequences, from energy shortages to a food crisis. The summit takes place against a darker backdrop than last year when the British, Canadian, French, German, Italian, Japanese, and US leaders met for the first time since before the Covid-19 pandemic and vowed to build back better. Soaring global energy and food prices are hitting economic growth in the wake of Russia's invasion of Ukraine. The United Nations warned on Friday of an "unprecedented global hunger crisis". Climate change, an increasingly assertive China, and … [Read more...] about G7 summit kicks off under shadow of Ukraine war, stagflation risk