INR is trading higher today
Other Asian currencies are trading mixed
Jahnavi Prabhakar,
Economist,
Bank of Baroda
Mumbai, November 22, 2023: Fed minutes highlighted the need to move ‘carefully’ and the policy to remain ‘restrictive’ in order to achieve the committee’s 2% inflation objective. Thereby signalling the continuance of higher for longer narrative. Separately, Japan government downgraded the assessment of economy sighting weaker domestic demand and noted its ‘pausing in parts’. On the other hand, Singapore’s economy rose at a much faster pace than anticipated at 1.1% in Q3CY23 from 0.5% in Q2.Given this data, the trade ministry has revised growth projection for CY23 to ‘around’ 1% (earlier 0.5-1.5%)).
- Barring Shanghai Comp (flat) and Sensex (higher), other global indices ended lower as investors’ monitored Fed minutes. US indices snapped its winning streak and closed in red on the back of the disappointing home sales data. However, Sensex ended in green led by a rally in consumer durable and real estate stocks. It is trading higher today, while other Asian indices are trading mixed.
- Global currencies ended mixed. DXY rose by 0.1%-continuing to hover near 2.5 month low, as Fed is expected to have reached the peak of its rate hike cycle. JPY ended flat, as investors seek more guidance from BoJ amidst reports of possible withdrawal from ultra-loose monetary policy stance. INR ended flat, but is trading higher today, while other Asian currencies are trading mixed.
- Barring India and China (higher), other global yields closed lower. 10Y yields in Germany, Japan and US fell the most, as investors reviewed minutes of Fed’s last meeting. Slump in housing sales also raised concerns over slowdown in economy. India’s 10Y yield increased a tad to 7.27%, as oil remain higher. However, it is trading lower today at 7.26%.
(The views expressed in this research note are personal views of the author(s) and do not necessarily reflect the views of Bank of Baroda. Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/ purchase or as an invitation or solicitation to do so for any securities of any entity.)
