Categories : Blog (249)

Yellen Boosts Dollar

Yellen stayed clear of focusing on any date but highlighted that rate hikes (plural) are expected this year so long as the economy stays on track. What was notable is that she said those forecasts don't incorporate possible fiscal changes, so...

Change the development paradigm

Three things are quite clear to us, in so far as the problem of stressed corporate balance sheets and poor asset quality of banks are concerned:   (a)   Key infrastructure areas like power, telecom, roads, and mining etc are suffering...

Canada-US Tweaks, Yellen Next

Canadian politicians and CAD traders have been scrambling for signs about how Trump saw the Canada-US relationship and we got the clearest signs yet on Monday. In a joint press conference at the White House, Trump said trade problems...

Coffee Conversations - 6

We had a quick chat with an official from S&P (name withheld on request) with respect to India's rating upgrade prospects and conflict with the government.   Following are the edited excerpts of this conversation:   Ques: In...

Since beginning of the year 2017, greed has been mostly the dominating factor in the market. Ignoring a brief spell of cautious trade in middle of January, the greed trade, represented by the small and midcap stocks' massive out performance over...

Dollar advances on Abe's diplomacy

For most of the past 30 years diplomacy was less-consequential. There were minor benefits when a leaders liked one another but the globalized trade rules were largely written in stone.   That's changing as Trump and populism reshuffle the...

The Economic Survey does rather candidly admits the problem of bad assets and stressed balance sheets. However, it inaccurately estimates the realized and potential impact of twin balance sheet problem, in our view.   The Survey finds the...

Phenomenal or Paranormal

Remember Fox Mulder on the X-Files.​...​  He had a poster behind his desk that said 'I want to believe'. He was referring to aliens and the parano​rmal but in the market's case, the belief i​s​ a near future with less taxes and...

Reports suggest that recently President Trump asked National Security Adviser Michael Flynn about whether it was a strong or weak dollar that was in the US interest. According to the leaks, Flynn suggested asking an economist.   The...

The government bond market had a premonition that the RBI's Monetary Policy Committee could disappoint with a status quo on interest rates. However, the committee altogether abandoning its accommodative stance for a neutral one, bringing the policy...

Throughout the election race and into his first days in office, Donald Trump promised a quick repeal and replacement of Obamacare. This week, he said change was “very complicated” and said it could take until next year. That...

"Need" is not always "demand"

The problem of non-performing asset is not merely a financial problem. It has a distinct moral hue. Usually, broad based ​NPAs occur when the economic cycle turns down, and businesses that had added capacities to cater to the rising demand...

Dollar buying doesn't push through

The US dollar started New York trading on Tuesday evening with a strong bid but the lack of follow through was concerning. Looking at the CFTC numbers, it's clear that enthusiasm for the long dollar trade is starting to wane. Contrast...

Viral Acharya may have joined the RBI's management team less than three weeks ago, but anyone listening to him speak to the media today, would have been surprised with his crisp, clear and assured communication style. When called upon to speak by...

Early birds may catch the cold

    The issue of massive NPAs with Indian banks has now become the subject matter of household discussions. Even a large part of the political narratives (especially the opposition attack on the incumbent government) is built around...

One of the most confounding features of the post demonetisation period has been the Reserve Bank of India's stoic silence on the quantum of deposits of old 500- and 1,000-rupee notes.   With the silence getting louder, media reports...

Slums & sense of non-belonging

  As per the Economic Survey 2016-17, migration within India is between 5 and 9 million annually. The migration has accelerated materially in past 15 yrs. Higher growth and a multitude of economic opportunities could therefore have been the...

Politics overcrowding

Economists love to talk about politics. If you turned on ​business channel​ any time over the past decade, theconversation would almost surely include politics. Minor changes were blown out of proportion while central banking and global trade...

The unpredictable nature of the new US Administration, and its seeming willingness to antagonize allies and rivals alike, and making arbitrary judgments, appears to have increased the uncertainty.Although Administration officials articulate...

Forex markets shrug NFP & FOMC

Friday's release of the US January jobs report was clearly positive on payrolls (227K vs exp 180K), negative on unemployment rate (rose to 4.8% from 4.7%) and negative on earnings (0.1% m/m vs exp 0.3% from downward revision to 0.2% from...

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