Making Sense

For Indian markets, the Interim Budget was a positive development. Consolidation path was way ahead of the expectations / Fiscal consolidation will likely be even stronger as the budget assumptions have been very conservative / No sops or Rural transfers – no major populist measures / Cap exp as share of GDP. The Government continued on the path of pre committed fiscal consolidation roadmap announced in the 2021-22 budget, to reduce fiscal deficit below 4.5% by 2025-26. The fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP, adhering to that path. The gross and net market borrowings through dated securities during 2024-25 are estimated at ` 14.13 and 11.75 lakh crore respectively. Both will be less than that in 2023-24. Now that the private investments are happening at scale, the lower borrowings by the Central Government will facilitate larger availability of credit for the private sector. Overnight in Global Markets, Fresh concerns have risen around Commercial Real ...

Meditate. Visualize !! Yet another strong US economic release -  Initial jobless claims for the week ending February 25 came in at 190,000 (Prior 192K) with 4w moving average at 193K.  Initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country.  Weekly Continuing Claims came in at 1.655 mln; Prior was revised to 1.660 mln from 1.654 mln. While continued claims are not a leading indicator, they provide confirming evidence of the direction of the U.S. economy. Low levels of Initial claims show tightness in the labor market and therefore sticky wage-based inflation pressures. Unit labor costs in the nonfarm business sector increased 3.2% in the fourth quarter of 2022, reflecting a 4.9% increase in hourly compensation and a 1.7% increase in productivity. Unit labor costs increased 6.3% over the last four quarters. Q4 productivity increased 1.7%, a 130 bps revision below the prelimina...