Government bond markets

Dear Reader , The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of. In a case of how cheer for the economy may not be so for markets, investors in US stocks fretted over excellent jobs data. US businesses added 5,28,000 jobs in July, beating most estimates by an embarrassing margin. US 2-year treasuries rose after the report, as the market priced in a more certain likelihood of another 75-basis point rate hike by the US Fed. But the S&P 500 slipped, as investors pondered over what too strong an economy could mean for interest rates. Those fears did not carry over to India, however, with the stock market rising by a strong 0.8 percent at 1.15pm. The RBI’s 50 basis point hike in the repo rate last week and its determination to stay in ‘withdrawal of accommodation’ mode is … [Read more...] about Moneycontrol Pro Panorama | Are US and Indian markets decoupling?

RBI Governor Shaktikanta Das. (File photo) Dear Reader , A day before the monetary policy announcement, the yield on the 10-year bond fell sharply on a media report that the MPC would signal a pause after Friday’s hike. Thankfully, the MPC held firm, refusing to oblige the bond markets. Not only did it increase the repo rate by 50 basis points, but also the MPC signalled more rate hikes in future by refusing to tone down its ‘withdrawal of accommodation’ stance. Much is being made of the fact that the policy rate is now at the pre-pandemic level. At 5.4 percent, the repo rate is now back to where it was in September 2019. But that is n​o big deal. GDP growth was a measly 3.7 percent in 2019-20 compared to RBI’s projection of 7.2 percent in 2022-23; retail inflation was a much lower 4.8 percent in 2019-20, compared to a projected 6.7 percent for 2022-23; the current account deficit was a comfortable 0.9 percent of GDP in 2019-20 as against projections of around 3 percent … [Read more...] about Moneycontrol Pro Weekender | Shaktikanta Das refuses to pivot

Representative image Shares slipped and the dollar hung off recent highs on Tuesday as investors eyed U.S. inflation data due a day later that will likely yield clues to any further aggressive Federal Reserve rate hikes. The stakes are high for the July U.S. consumer prices report on Wednesday after an unexpectedly strong U.S. jobs data last week boosted expectations of a sharp interest rate increase to tackle soaring inflation. The broader Euro STOXX 600 fell 0.6%, after logging its best session in nearly two weeks on Monday, with German stocks down 0.7%. Miners and autos, among top gainers a day earlier, led declines on Tuesday. Wall Street futures pointed to slim gains. "The focus is on tomorrow's U.S. inflation numbers and whether or not they are likely to show any indication of a softening of inflationary pressures," said Michael Hewson, chief market analyst at CMC Markets. Close "Are we near the peak, and will tomorrow's CPI numbers reflect that?" … [Read more...] about Stocks stumble as caution reigns ahead of U.S. inflation data

Share to Twitter Share to Linkedin It’s a popular narrative on the Left at the moment to say that members of the Right have an unhealthy disdain for “experts.” Washington Post columnist Catherine Rampell is a notable critic on the matter, but the view here is that her criticism misses the mark. Reasonable members of the Right don’t loathe experts as much as they dislike central control. Reducing all of this to the absurd, let’s imagine for fun that the smartest individual in the United States is none other than our President, Joe Biden. In a nation populated by geniuses, Biden sitting at the top in terms of intelligence wouldn’t alter a simple truth frequently ignored by the expert reverent: there’s arguably not a fraction yet conceived that could properly convey how small Biden’s knowledge would be relative to the collective knowledge of the American people. All of which hopefully explains why markets always and everywhere beat central planning. It’s … [Read more...] about Central Planning Fails Just As Much When Conservatives Are the Planners

Representative image Impostor syndrome seems to be more common than actually thought, though at a collective level. People may often feel that the groups they are affiliated with may be underperforming in comparison to other groups. Although this self-critical approach may work in certain cases, it may also overlook the positives, and decrease the morale of those affiliated with the group. Many in India seem to have a collective/national-level impostor syndrome. While the Indian economy is much better placed than its peers in the emerging markets, and other economies, the government is being criticised on the economic front. The criticism comes when the fundamentals of the Indian economy are robust, despite the exogenous shocks caused by the COVID-19 pandemic, supply chain disruptions, monetary policy tightening by the US Federal Reserve, the Ukraine-Russia conflict, and inflated crude oil prices. India's macroeconomic health remains robust despite external pressures, and ongoing … [Read more...] about Bibek Debroy writes: India’s economy is better placed than its peers, other economies around the world

After 20 years of being in business, this is what I know for sure: Making customer service a priority is one of your best forms of protection, hands down. What does putting your customer first look like in practice? Asking them about their experience. Answering their questions in a timely manner. Delivering on your promises. Being consistent, truthful, and transparent. Developing products and services that actually solve problems, inspire joy, and then continuing to improve on the experience. Treating each and every person who engages with your brand like a friend. Refusing to settle. Taking responsibility for your mistakes and learning from them. Never forget: Establishing trust takes time, and can be lost in an instant. To build a successful business today, you must truly care about your customer. Few entrepreneurs I know embody this philosophy more wholeheartedly than Marissa Louie , CEO and chief designer of the hit magnetic stuffed animals, Animoodles . The … [Read more...] about How This Entrepreneur Built the Hottest Plush Startup in Years

Representative image The Reserve Bank of India announced measures to ease forex inflows. This explainer helps us understand the measures and objectives behind them. What are forex inflows and why are they needed? One of the major factors of a country’s growth is higher savings. Savings are channelised into investments, which help drive the growth of an economy. If the domestic savings rate is low or the investment rate is higher than the savings rate, foreign exchange savings can be used to bridge the gap. Foreign exchange savings are nothing but net inflows of foreign capital. The Indian economy was liberalised in 1991 and efforts were made to attract forex inflows. There are various categories of forex such as Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), NRI deposits, and External Commercial Borrowings (ECB). The government and the Reserve Bank of India welcome equity flows such as FDI and FPI, but are cautious about debt inflows because heavy … [Read more...] about MC Explains | Will steps to liberalise forex inflows help the rupee?

- A + A (Aug 9): China’s top auditor is conducting a review of the US$3 trillion trust industry, paving the way for a potential overhaul of a key shadow banking sector where losses on property loans are mounting. In an unscheduled move, the National Audit Office — which previously led an examination of bank exposures to Jack Ma’s Ant Group Co — has for the past month been inspecting the books of at least 20 trust firms, including the top five, to gauge the risks they pose to financial stability, according to people familiar with the matter. The firms are being asked to report on their risky loans to developers and any plans to dispose of them, the people said, asking not to be named as they’re not authorised to speak publicly. The audit office is expected to submit its conclusions to policy makers in Beijing, who may decide on the future reforms of the sector, the people said. While it is unclear what regulatory action the scrutiny will spur, the move illustrates … [Read more...] about China orders surprise audit of US$3 trillion trust industry

Share to Twitter Share to Linkedin Latin America is going bad – very bad. Many of the region's large economies have lurched toward leftist populism in recent years. With the election of former guerrilla leader Gustavo Petro to the presidency, Colombia seems to be another victim of the trend. But for such leftists, the big prize is still to be captured: Brazil. With almost half of South America's economy and population and bordering ten countries, what happens in Brazil is always relevant for the Americas and the world. The country's upcoming presidential election is a case in point. The two leading candidates, Luiz Inácio Lula da Silva and Jair Bolsonaro, both have plenty of detractors. Local and foreign media cover their campaigns and road to the election. There is seldom coverage of those who work outside the political party system to try to influence Brazil's future. I want to highlight some of them here. I will only focus on non-religious organizations … [Read more...] about Promoting The Free Economy In Brazil

Share to Twitter Share to Linkedin D onald Trump has made a lot of investments over his career. One of the flashiest, his purchase of Mar-a-Lago, also turned out to be one of the best. Trump paid an estimated $10 million for it in 1985 and turned it into a moneymaking club, before a rising real estate market made it one of the most valuable homes in the world. Today, the crown jewel of Palm Beach is worth an estimated $350 million. The property, which the former president said the Federal Bureau of Investigation raided on Monday, was historic long before Trump got involved with it. The cereal heiress Marjorie Merriweather Post built the estate from 1924 to 1927, incorporating details befitting the Roaring Twenties. Stones traveled from Genoa, Italy via three ships. Silk-needlework panels came from an old palace in Venice. The living room rug hailed from a Spanish monastery. In 1973, Post passed away, bequeathing Mar-a-Lago, which means “sea to … [Read more...] about How Much Has Trump Made From Mar-A-Lago, His Palm Beach Estate Under Siege?