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India - Recap over the last week

I was away the whole last week of December as I took a road trip with family to Nagpur and Panchmarhi (MP). I was amazed by the Mumbai - Nagpur Expressway ME - 2 / Samruddhi Mahamarg - a 600km stretch of road and it felt like driving on AutoBahn. You easily accelerate to 120 - 130 kmph on straight roads. From Nagpur, we drove off to Panchmarhi. We took the morning safari and stopped at a huge tract of land laden with grass covered in Dewdrops. We moved our hand over the dew laden leaves and then as we clapped our hands the whole mist fell on our faces. It was wonderfully refreshing and I thought I got an extra glow. It was a fantastic trip and recommend Panchmarhi as a must travel destination. GoI announced the sale of 3 dated securities for a notified amount of Inr 34K crs with an option to retain an additional Inr 2K cr using uniform price method for 7.32% GS 2030, 7.18% GS 2037 and multiple price method for 7.25% GS 2063 securities. 97.38% of the ₹2000 banknotes in ci...

Chair Powell - Unequivocally Dovish at Jackson Hole ! Front and Centre Focus on Employment Numbers | USD Index at lower end of the 100.50 - 106.50 Range

I have two basic rules about winning in trading as well as in life: 1. If you don't bet, you can't win. 2. If you lose all your chips, you can't bet. ~ Larry Hite Over the last 3 weeks, after the Aug 5 lows, yields on US2s have consolidated in the 3.90% - 4.10% price range and US10s have progressively made lower lows to close the week at 3.92% and 3.80% respectively. US2s10s bull steepened to close the week at -11.90 bps. USD index closed the week at 100.68, 5% off highs of 106.13 June highs and within close proximity to the established range of 100.50 - 106.50 since last year. There is a 76% probability of a 25 bps rate cut in the Sep Policy. The market is broadly equally divided between a 25 bps and a 50 bps in the November Policy and holds a 87% probability of FFR in the 4.25% - 4.50% range by end of 2024. By next year September Policy, the market assigns a 90% probability of FFR at 3.25% - 3.50%, i.e. 200 bps of cuts in next 1 year. The Atlanta Fed GDP Now ...

Deflation in Core Goods Prices| No sustained relief on the Shelter CPI | Benign Estimates for July PCE | Consumer Spending Resilience

In this Second Part, we look at the economic data prints: A Benign CPI reading - mom inflation at 0.15% mom and Core print at 0.17% mom. Core goods disinflation continued with mom at -0.32% with 3m annualized rate at -1.93%. Core Services Inflation rose at 0.31% mom which is at pace higher than the average 0.18% mom in the prior 2 months. Super Core Services also rose at a mild 0.14% mom. The respite in Shelter inflation seen in June appears short lived with prices rising at 0.38% mom in July. There has also been a talk around re-acceleration in inflation as mild prints in the second half of 2023 weigh on the readings going forward. Fed members have also highlighted that the Inflation progress last year benefited from supply-side improvements like eased supply chains, increased labor force participation, and lower energy prices. However, these factors may not continue to reduce inflation, as supply chains have normalized, labor force participation has stabilized, and i...

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India - Recap over the last week

The Moment of Reckoning is here !! 25 or 50 Bps and the SEP || Benign PCE Expectations || USDJPY 145.75 or 137.50 ??

Continued Moderation in the Labor Market - Call for Action

The Pendulum Swings Again - From Soft Landing to Fears of a Recession | Employment | US2s and US10s Technical Levels | Macro Musings

DXY holds 100.50 support| US2s10s Steepening persists| Economic Data at Cross Roads | Is more than 200 bps of Rate Cut space available?

Recalibration of Policy Stance | Ride in Risk Assets | Soft Landing | Close out US2s10s Bear Steepeners

Chair Powell - Unequivocally Dovish at Jackson Hole ! Front and Centre Focus on Employment Numbers | USD Index at lower end of the 100.50 - 106.50 Range

Fed Fund Pricing Gyrations - Economist | Federal Reserve Guidance | Market Pricing - Point of Convergence

Deflation in Core Goods Prices| No sustained relief on the Shelter CPI | Benign Estimates for July PCE | Consumer Spending Resilience

Wish you a wonderful 2025

Summary of Levels