CENTRAL BANK POLICY
India bonds give up gains as high oil prices weigh
Indian government bonds declined on Monday due to rising oil prices affecting market sentiment and the rupee. The rupee fell for the third consecutive day, adding pressure on bond yields and currency. India's central bank is expected to consider interest rate hikes to stabilize the currency amidst inflation concerns. The Reserve Bank of India has raised its inflation forecast, anticipating a peak of 6% in consumer prices.
French bond selloff eases as country spared ratings downgrade
On Monday, the selloff in French government bonds paused after Moody's maintained its rating of Aa3. Weekend protests were mostly peaceful, reducing tensions in the country. France's 10-year OAT yield fell following a rise to its highest level since June 2002. The focus now turns to the European Central Bank's upcoming policy decision on Thursday. Analysts expect the ECB to monitor the rising yields closely and evaluate their impact.
Global Market: BOJ nears historic inflation milestone, shifts focus to rate hikes
The Bank of Japan is expected to declare its nearly 14-year battle to achieve 2% inflation successful while keeping interest rates unchanged at 1.25%. With wage growth and inflation expectations strengthening, policymakers may signal further tightening, potentially in December, as they balance persistent price pressures against economic growth and financial stability.
ECB Meeting: Five key questions on rates, inflation and Lagarde's exit
The European Central Bank is widely expected to hold interest rates at 2.5% amid elevated energy prices, eurozone inflation and France’s financial instability. With inflation reaching 3.8% in September, markets anticipate further rate hikes. Policymakers will assess economic risks, bond market pressures and leadership changes before signalling future monetary policy decisions.
Global Market: China stocks slip as tech shares fall ahead of central bank meetings
Chinese stocks declined as technology shares weakened and investors adopted a cautious stance ahead of major central bank meetings and corporate earnings. Concerns about the AI-driven rally, slowing economic conditions and possible trust-sector selling added to market pressure, while investors watched for support from state-backed funds.
RBI rate hikes: How short-duration funds and high-quality corporate bonds can protect your debt portfolio
Investors must position fixed income portfolio for further rate hikes. But this cycle may look different.
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Global Market: Japan bond yields edge higher ahead of key central bank meetings
Japanese government bond yields edged higher as investors assessed the monetary-policy outlook ahead of meetings by the Bank of Japan and the US Federal Reserve. Markets expected both central banks to keep rates unchanged while monitoring signals about possible December rate increases, inflation and economic growth.
Global Market: China's yuan hits four-year high as dollar weakens ahead of policy meetings
The yuan of China has surged to a peak not seen in four years against the US dollar, driven by evolving market dynamics and currency evaluations. The People's Bank of China established this daily midpoint, marking its strongest position since early February. Experts predict that this upward trend in yuan value may persist, citing signs of dollar softness intertwined with local policy adjustments.
Currency markets subdued ahead of pivotal central bank week
As the week kicks off, major currencies hover in narrow trading bands amidst pivotal central bank meetings. Oil prices experienced a decline after hitting a six-month high, affecting the strength of the dollar. Meanwhile, US Treasury yields remain elevated due to lingering inflation worries connected to the rising oil costs. With five significant central banks likely to hold rates steady, market watchers are keen to decipher forward guidance.
Gold price today: Gold rate, silver price predictions by experts are out. Check here
Gold rate: In international markets, Comex gold futures for the December delivery declined USD 173.2, or 4.14 per cent, over the past week, to close at USD 4,007.9 per ounce.
5 world market themes for the week ahead
An important week is upcoming with central banks like the Federal Reserve and European Central Bank making policy decisions. Major companies, including Alphabet, Amazon, and Microsoft, are set to report their earnings. Political events are also significant, with elections in Israel and Brazil influencing markets. China's leadership will hold discussions focused on party governance amidst external pressures.
Strong macro fundamentals, policy interventions to anchor eco against global headwinds: RBI bulletin
Strong macroeconomic fundamentals continue to support the Indian economy against global inflation and trade tensions. Recent geopolitical frictions have resulted in increased prices and supply chain issues, leading to policy changes. Currency fluctuations were observed, but measures by the Reserve Bank helped stabilize the rupee recently. Foreign Direct Investment remains robust, driven by significant inflows from major sources like the US and Singapore.
RBI governor reiterates listing requirement for top NBFCs as focus intensifies on Tata Sons
India's central bank governor said on Friday non-bank finance companies classified in the upper layer are required to list on the stock market, reiterating the Reserve Bank of India's stance on the listing of Tata Sons without commenting directly on the company.
RBI's Rs 2.5 lakh crore liquidity infusion raises questions over tightening policy signal: SBI Report
In its report, SBI said the RBI had consistently signalled its commitment to monetary tightening through its policy resolution, the Governor’s statement and the minutes of the Monetary Policy Committee (MPC). The liquidity infusion through repo auctions, however, appeared difficult to reconcile with this approach.
India's 10-year bond falls for 10th week in record slump
Indian government bonds have experienced their worst decline in thirty years, falling consecutively for ten weeks. Rising crude oil prices and a hawkish central bank stance have impacted the market negatively. The benchmark repo rate was recently raised to 5.5%, with further increases expected. The 2036 bond yield rose to 7.4740%, indicating a broader trend of increasing yields. These developments may significantly affect India's import bill and inflation outlook.
Global Market: Eurozone bond markets stabilise after volatile week
Eurozone government bonds stabilised after a volatile week as investors balanced sovereign debt concerns against safe-haven demand amid uncertainty over AI investments and global growth. French borrowing costs remain under pressure ahead of key central bank policy decisions.
Global Market: Bank Indonesia defends policy mix after market confusion
Bank Indonesia has defended its latest policy package combining an unchanged benchmark rate, a higher deposit facility rate and reserve requirement cuts. The central bank says the measures aim to improve monetary policy transmission, boost banking liquidity and support credit growth.
Indian bonds tumble on oil surge, RBI rate hike fears
Indian government bonds experienced a decline as the benchmark yield exceeded 7.45% on Thursday. Oil prices rose significantly, reaching $112.50 per barrel in Asian trading amid geopolitical tensions. The Reserve Bank of India has raised its repo rate to 5.50%, indicating a potential for further hikes. Inflation concerns are mounting, with expectations for retail inflation to surpass the central bank's tolerance limit.
Global Market: Japanese banks see rising corporate loan demand ahead of BOJ meeting
Japanese banks report rising corporate funding demand despite the Bank of Japan’s 1.25% interest rate, reinforcing expectations of further monetary tightening. Persistent inflation risks, resilient lending and government concerns will shape the central bank’s upcoming policy decision.
India's interest rate gap with G7 in focus as RBI weighs inflation risks: Report
India's monetary policy is now shaped by the interest rate gap with major developed economies and rising inflation. The Reserve Bank of India is concerned about inflation risks and input cost increases. Recent GDP growth figures indicate resilience supported by strong private consumption and exports. YES Bank predicts a cumulative rate hike of 50 basis points by the RBI.
Global Market: China's yuan hits more than four-year high against dollar
In a remarkable turn of events, China's yuan has surged against the US dollar, hitting levels unseen in over four years. This strength is linked to a declining dollar and prevailing central bank strategies. Although the People's Bank of China set a midpoint lower than anticipated, its actions aim to moderate currency appreciation. Analysts believe the yuan's resilience may hinge on sustained export performance and domestic demand influences.
Global Market: Bank of Korea holds interest rates at 3% after back-to-back hikes
The Bank of Korea kept its benchmark interest rate unchanged at 3.00% on Thursday, pausing after back-to-back 25-basis-point hikes in July and August. The decision was in line with expectations of all 34 economists surveyed by Reuters.
Why is the RBI pulling liquidity out of banks and injecting it back again?
Reserve Bank of India has significantly reduced banking system liquidity from a peak surplus in a short time. Liquidity surged after banks received funds from overseas Indians under the FCNR(B) scheme. The central bank utilized reverse repo auctions and cash reserve ratio adjustments to absorb this surplus effectively. As overnight rates increased following these liquidity measures, RBI temporarily infused funds to manage sharp rate rises.
India’s economy stays resilient at 7.1%, but rising inflation raises a red flag, says RBI's Sanjay Malhotra
The Indian economy is projected to maintain a growth rate of 7.1% for the year 2026-27. This projection is an increase from the previously estimated 6.7%. RBI governor Sanjay Malhotra noted that inflationary pressures are rising, which could impact the growth outlook. Despite turbulent global conditions, India's economic resilience has been remarkable according to the governor.
Global Market: BOJ's Himino says Japan inflation near 2% target, signals further rate hikes
Bank of Japan Deputy Governor Ryozo Himino says underlying inflation is nearing the central bank’s 2% target, while accommodative financial conditions and rising cost pressures strengthen expectations of further interest rate hikes.
Global Market: ECB sees Euro liquidity support boosting global currency role
European Central Bank Chief Economist Philip Lane stated that stronger euro liquidity facilities can enhance the currency's global role. More than 30 central banks have expressed interest in the ECB’s expanded euro liquidity initiatives. These arrangements may boost confidence in the euro and encourage its use in international transactions. Additionally, euro area bond markets could benefit from higher official reserve purchases of euro-denominated assets.
Indian bonds sell off on oil shock ahead of RBI policy minutes
Indian government bonds experienced a significant decline due to rising oil prices, raising concerns about inflation among investors. The benchmark bond yield has reached its highest point since March, leading to a more cautious trading environment. Additionally, consumer inflation in India rose to 5.54%, with forecasts indicating further increases in October.
Dollar on back foot as US yields, crude prices dip; Aussie buoyed by hawkish RBA
The US dollar is facing downward pressure with both Treasury yields and crude oil prices on the decline. Meanwhile, the Australian dollar is nearing a three-week high, buoyed by supportive remarks from Reserve Bank of Australia Deputy Governor Andrew Hauser. Wall Street had a robust session as technology earnings began with results from SpaceX.
Gold slips as investors weigh Fed rate outlook
Gold slipped in early Asian trade on Tuesday as investors awaited the US Federal Reserve policy decision next week for signals on interest rates and the broader outlook for monetary policy.
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