Interest rates

Could China cut interest rates or take other easing measures next week?

Highlights

Eurozone retail sales jumped slightly more than expected year-on-year in February, with motor fuel and non-food items driving growth. The European Union’s statistics office, Eurostat, said retail sales in the 19 countries sharing the euro rose 0.3% month on month in February, up 5.0% year on year. annual.

China has once again pledged to step up monetary support, raising fears of interest rate cuts or other easing measures as early as next week.

The proportion of Japanese households expecting prices to rise in a year hit a 14-year high, according to a central bank survey, as inflationary pressures from rising commodity costs mounted.

USD/INR Movement

USDINR remained higher amid a strong dollar and exits from domestic equities. The dollar hovered near two-year highs against a basket of major currencies after meeting minutes showed the Federal Reserve preparing to act aggressively to fight inflation, while commodity-linked currencies raw have fallen from recent highs. Investors would be watching closely for the RBI MPC statement which is due tomorrow.

Global Currency Updates

The pound traded slightly higher against the US dollar after US Treasury yields fell from their highs. The British administration has imposed an outright ban on all new overseas investment in the country, Reuters reported. However, due to the lack of significant economic data in the market due to be released by the UK, USD price momentum will play a key role in the direction of the GBPUSD pair.

The euro traded slightly weak amid a strong dollar and pessimistic sentiments in the global market. Additionally, investors fear that further sanctions against Russia for its war crime could hurt the economy and drive energy prices higher. Additionally, market participants will remain cautious ahead of the ECB minutes and the outcome of the upcoming French presidential election.

Bond market

Yields on US Treasury bonds slid from multi-year highs, providing respite for stocks after Federal Reserve minutes released the day before added to the rate hike momentum already priced into markets. The gap between the 2- and 10-year segments peaked in a week, reversing a recent reversal often seen as a sign of recession. The Indian bond market traded sideways ahead of tomorrow’s RBI MPC meeting. India’s benchmark 10-year index closed the day at 6.916%. The overall movement recorded in sovereign bond yields remained below 5 basis points.

Stock market

Indian equity benchmarks Sensex and Nifty 50 extended losses as they tracked weakness in global markets. Losses in financials, autos, IT and metals stocks dragged major indices lower, although gains in pharmaceutical stocks provided some support. Broader markets slipped into the red during the second half of the session, with the Nifty midcap 100 ending the day down 1% and the Nifty smallcap 100 down 0.31%.

evening sun

“Focus on initial U.S. jobless claims data.

European markets were choppy as volatility persisted following details of the US Federal Reserve’s monetary tightening plans and the ongoing war in Ukraine. U.S. stock index futures edged higher as Treasury yields fell from multi-year highs, offering some relief to growth and tech stocks battered this week by worries about a more hawkish Federal Reserve. Investors around the world are also watching the fallout from China’s strict Covid-19 controls as it battles a new surge in cases, potentially further disrupting global supply chains.