INR continues to hover near record low levels
Sonal Badhan,
ECONOMIST
Bank of Baroda
FinTech BizNews Service
Mumbai, 4 November, 2024: US labour market data is pointing towards a slowdown,
as non-farm payrolls rose by only 12k in Oct’24 versus est.: 113k increase. However,
analyst believe that this is temporary and was largely due to factors such as: strike by
Boeing workers and 2 major hurricanes. Manufacturing sector was hit the most.
This is last jobs report before Presidential elections and Fed rate decision, both due this week.
US ISM manufacturing index for Oct’24 also showed that activity contracted at a faster pace
(46.5) versus last month (47.2). Production was most impacted, and input price
reportedly increased. In view of this, and awaiting the result of closely fought US
Presidential elections, investors expect 25bps Fed rate cut this week. Apart from
developments in the US, markets this will also react to RBA’s decision, China’s
parliamentary meeting outcome, and South Korea’s inflation report.
US stocks edged up as traders are frontloading positions ahead of election.
Opinion polls suggested a tight run. This will also coincide with Fed meeting
where policy easing is anticipated. Nikkei moderated weighed down by yen.
Shanghai Comp softened awaiting fiscal stimulus. Sensex inched up driven by
auto stocks. It is trading lower today while Asian stocks are trading mixed.
Global currencies ended mixed. DXY rose by 0.3%, driven by heightened
political uncertainty ahead of a close US Presidential election race. Further,
despite softer labour market data, analysts are expecting Fed to cut rates less
aggressively. INR continues to hover near record low levels, and is trading flat
even today, while other Asian currencies are trading mixed.
US 10Y yield rose at the sharpest pace as earnings data showed some
stickiness. This was also supplemented by uncertainty looming over US
elections. US and Japan’s 10Y yield remained stable monitoring differential with
US yield. China’s 10Y yield moderated ahead of policymakers meet. India’s 10Y
yield inched up by 2bps. It is trading at the same level today.
