INFLATION EXPECTATIONS
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.
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.
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.
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.
Oil, US Treasuries prop up Indian bonds
Indian government bonds increased in early trading as oil prices declined, following a previous rally. The Brent crude price slipped significantly after hitting a six-month high last week, which impacted the debt market. Foreign investors have sold a substantial amount of Indian government debt since August, contributing to a prolonged rise in benchmark yields. Concerns over inflation and the Reserve Bank of India's rate decisions are influencing market sentiments.
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G-Sec yields at three-year peak, could climb to 7.75% by December
India's benchmark 10-year government bond yield is expected to reach 7.75% by December. This increase is influenced by high crude oil prices and tight liquidity conditions. Persistent bond supply and expectations of further monetary tightening are driving the yield higher. Foreign portfolio investors have sold significant amounts of Indian debt, contributing to market instability. Economic concerns are spreading across emerging markets due to the interplay of oil prices and yields.
Gold lingers near three-month low ahead of Fed policy meeting
Gold prices dipped close to a three-month low, reflecting worries from investors as the Federal Reserve meeting approaches. While an interest rate hike appears more likely for December, this week’s chances remain low. In the oil market, prices fell back after a prior rise, amid ongoing supply worries linked to conflicts.
Brazil presidential election results: Five economic challenges facing re-elected President Lula
Brazil's economy is encountering significant challenges as President Lula starts his fourth term in January. Soaring public debt and rising mandatory spending limit budget flexibility, complicating fiscal management. High interest rates and persistent inflation hinder economic growth, impacting household and business debt levels. Lula's ability to implement reforms may be constrained by a conservative Congress, complicating his agenda.
US consumer sentiment near record low ahead of midterm elections
In October, consumer sentiment in the U.S. plummeted to a concerning 48.0, driven by rising prices and economic worries amid the ongoing Middle East conflict. Survey results suggest that independents show the steepest drop in confidence, approaching historical lows. Additionally, inflation expectations have risen, marking a continuation of trends from earlier this year. Federal Reserve officials are attentively observing these shifts as they plan future interest rate adjustments.
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.
Global Market: Japan’s core inflation accelerates, putting BOJ rate hikes in focus
Japan’s core inflation rises to 2.1% in September, exceeding the Bank of Japan’s 2% target for the first time in nine months. Higher energy costs, yen weakness and AI-related demand could strengthen the case for further interest rate hikes.
US bond market down: Why are 10-year, 30-year, 2-year treasury yield notes are falling? Check latest predictions
US bond Yields have dropped in recent days, as concerns about a slowdown in AI spending and its impact on economic growth have overshadowed economic data, which showed persistent inflation pressures.
MPC minutes: Two more interest rate hikes on cards, maybe even a third
Market participants and economists now expect a 25-bps increase in the December and February reviews. A further 25-bps increase in April isn't ruled out if crude oil prices remain persistently above $100. One basis point is a hundredth of a percentage point. "After the minutes were released, we think the probability of a consecutive hike in December has increased. Our terminal rate forecast is now at 6% for this hiking cycle and we expect the cycle to be rather shallow," Barclays said in a note.
Gold price today: Gold rate crashes to lowest in 2 months, silver price drops. Here's what to expect
Gold rate prediction: Goldman Sachs expects one more 25-basis-point hike in December, lifting the peak policy rate range to 4.00 per cent-4.25 per cent.
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.
Tata Motors CV Q2 Results Preview: Profit may rise up to 44% YoY, revenue 45%; margins, volume growth in focus
Tata Motors Commercial Vehicles is expected to post strong Q2FY27 revenue and profit growth, driven by 43% volume expansion. However, rising input costs, margin pressures and divergent brokerage estimates remain key investor concerns ahead of results and management commentary.
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.
Indian bonds steady after RBI minutes signal more rate hikes
Indian bond yields remain steady at approximately 7.45%, influenced by growing inflation anxieties. The Reserve Bank of India recently increased the repo rate to 5.50%, hinting that further hikes may follow. With climbing oil prices and food inflation heightening economic concerns, analysts speculate another increase may occur in December, before a potential pause. The elevated energy costs pose significant challenges for India's economy, affecting the rupee and government finances.
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.
RBI flags widening inflation risks, puts rate cuts on ice
RBI's Monetary Policy Committee raised the benchmark repo rate by 25 basis points to address rising inflation concerns. Governor Sanjay Malhotra indicated a generalisation of inflation, with many commodities exceeding 4% inflation. Deputy Governor Poonam Gupta highlighted the influence of external supply-side shocks on inflation projections. External members expressed concerns about the implications of an aggressive rate hike on economic growth.
Inflation remains top of mind, MPC minutes show
RBI's monetary policy committee has increased the benchmark repo rate by 25 basis points due to inflation concerns. Core inflation has shown an upward trajectory, indicating a normalization from earlier benign levels. Various members expressed views on external supply shocks impacting inflation expectations and the need for timely policy adjustments. The differing opinions highlight the complexities of achieving growth while managing inflation effectively.
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: European shares struggle for direction as France unrest weighs on sentiment
European shares remained stagnant amid escalating unrest in France, raising alarms over fiscal health and growth prospects. While some optimism was generated from positive earnings reports by companies like Randstad and EssilorLuxottica, a downgrading of Carrefour's earnings forecast dampened investor sentiment. Additionally, new consumer inflation figures from Britain added layers of complexity to the interest rate and economic stability outlook, resulting in a market atmosphere marked by uncertainty and hesitation.
Global Market: UK inflation rises to 3.5% in September, boosting rate hike bets
UK inflation rises to 3.5% in September from 3.1% in August, exceeding expectations as higher fuel prices linked to the Iran war add to price pressures. Sticky services and core inflation strengthen expectations of a potential Bank of England rate hike.
Bank of Japan may raise inflation forecast, stand pat on rates, sources say
The Bank of Japan plans to slightly upgrade its fiscal year 2027 inflation forecasts this month. Interest rates are expected to remain stable at 1.25% during the upcoming policy meeting in late October. While inflation risks are present, there is no immediate urgency for further rate hikes. Recent data indicates that inflationary pressures are not escalating significantly at this time.
Correcting rupee against fundamentals ultimately futile, says RBI's ex-guv Subbarao
D Subbarao advocates for allowing the rupee to find its level based on economic fundamentals. He criticizes costly short-term measures that do not address structural issues behind capital outflows. The rupee's recent recovery followed the Reserve Bank of India's measures to reduce dollar demand. Subbarao highlights the importance of tax reforms to attract foreign investment in India.
Asia set to ‘continue to outpace the world’, says IMF, as it asks central banks to stay focused on price stability
Asia's central banks are advised to potentially tighten monetary policy in response to rising inflation expectations. Inflation has been impacted by an oil shock from the ongoing Middle East war, raising near-term price expectations. The International Monetary Fund emphasizes the need for clear communication from central banks on maintaining price stability. While Asia's economic growth continues to exceed the global average, risks remain that could impact fiscal stability.
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