Business in the Week Ahead in India: The Modi 3.0 stage is set, with key central bank policy decisions and sensitive macro parameters expected next week.
The 7-phase General Elections will be declared on June 4, impacting future policy direction. S&P Global expects economic reforms and fiscal policies to remain consistent, regardless of the election outcome.
The Reserve Bank of India and ECB and Bank of Canada will decide on interest rates.The Reserve Bank of India (RBI) has kept policy rates at 6.5% for the 8th consecutive time, indicating that rate cuts can wait until inflation is under control. With India’s high growth rate, the majority within the Monetary Policy Committee is hesitant to cut rates.
The new government’s formation is also a focus, with the upcoming Budget revealing its intentions. The question remains whether the industry will double down on private capex.
Markets are recovering after election chaos, with Sensex and Nifty reaching new highs. The VIX is also showing signs of volatility. The future of foreign investors depends on the incoming government’s ability to deliver goods.
Monday – June 10
Eurozone Consumer Inflation Expectations: Median expectations for inflation over the next 12 months in the Euro Area eased to 3% in March from 3.1% in the previous month. This turned out to be the lowest level since December 2021, according to the latest ECB Consumer Expectations Survey. April numbers are on the way.
Tuesday – June 11
US Business Optimism Index: The NFIB Small Business Optimism Index in the US hit 89.7 in April, up from a more than 12-year low of 88.5 in March and ahead of forecasts of 88.1. Though 3 points down from March, inflation played out as the major concern for 22% of owners surveyed.
Wednesday – June 12
Fed Interest Rate Decision: It’s time for the US Fed to reveal its mind. Will it follow the ECB with a rate cut? That will be clear on Wednesday. The Federal Reserve kept the target range for the federal funds rate unchanged at 5.25-5.5% during its May meeting for the sixth consecutive time. This is because inflationary pressures and a tight labour market offered a cautionary note to the policymakers.
Inflation Rate: The annual retail inflation rate as measured by the consumer price index (CPI) dropped slightly to 4.83% in April from 4.85% in the previous month. That’s an 11-month low, mostly in line with market estimates of 4.8%. It was the eighth straight month that inflation stayed within the RBI’s tolerance band of 4% with a margin of 2 percentage points on both sides. The May inflation print is due Tuesday.
Industrial Production: Where did India’s IIP stand in April? Industrial output in India went up by 4.9% year on year (YoY) in March, a little below market expectations of a 5.1% growth. Manufacturing output, which accounts for nearly 78% of total industrial production, expanded by 5.2%.
Thursday– June 13
Passenger Vehicles Sales: Total passenger vehicle sales in India grew 1.2% to 287,746 in April from a year earlier, but down sharply from an 8.9% surge in the previous month, data from Automobile Manufacturers (SIAM) showed. The SIAM numbers for May are slated for Thursday.
US Initial Jobless Claims: The number of people claiming unemployment benefits in the US grew 8,000 to 229,000 for the week through June 1, much above market expectations of 220,000. That’s the highest reading since the eight-month high of 232,000 from early May. The data for the week up to June 8 are in the works.
Friday – June 14
BoJ Interest Rate Decision:Â Next week, the Bank of Japan is scheduled to announce its policy decision on interest rates. It had flagged upside risks to inflation and dropped pointers that it could reset monetary policy, but expects accommodative financial conditions to remain for the time being, according to a summary of its April policy meeting.
WPI Inflation: India’s wholesale prices as measured by the wholesale price index increased by 1.26% YoY in April, up from a 0.53% rise in the previous month and topping market estimates of a 1% gain. It marked the sixth straight wholesale price rise and the fastest pace since March 2023 on the back of a faster rise in food and primary articles amid a rebound in fuel prices.
Balance of Trade: India’s merchandise trade deficit came in at $19.1 billion in April, above the market consensus of $17.2 billion, a sharp jump from the 11-month low of $15.6 billion in the earlier month. Imports grew by a steep 10.3% to $57.28 billion in April from a year ago, despite the aggressive weakening of the rupee since last year. That’s mainly due to higher import bills for gold amid its soaring price, petroleum products, and electronics.
Must read book about investing – check here Business in the Week Ahead in India: India’s inflation/manufacturing data, US inflation and initial jobless claims etc. in Focus.Business Business Business in the Week Ahead in India: India’s inflation and manufacturing data, along with US and Euro area data, will be released, with US inflation and initial jobless claims crucial for Federal Reserve rate cut speculation.