Consumer prices in the United States rose faster than expected last month, suggesting that the Federal Reserve will continue to make inflation its priority. With markets already widely pricing in another 75 basis point interest rate hike, it was hoped that breaking the inflation peak would allow the Fed to give in.
RBI could raise rate by up to 50bps as inflation rises slightly
As retail price inflation accelerated again to 7% in August, there is growing consensus among economists for another 35-50 basis point (bp) repo rate hike in policy in September, a move that some fear will hamper growth.
An aggressive 50 basis point increase in the repo rate would take the policy rate to 5.9%, the highest in more than three years. It will also be the third consecutive 50 basis point rate hike in the current tightening cycle, starting with a surprise 40 basis point hike in May. (Whole story)
Asian stocks extend global selloff amid bets on more aggressive Fed
Asian stocks fell, the dollar held firm and the U.S. yield curve inverted deeply on Wednesday as a searing U.S. inflation report dashed hopes of an inflation spike and fueled bets that interest rates may need to be raised higher and for longer.
Data from the US Department of Labor showed on Tuesday that the consumer price index rose 0.1% on a monthly basis against expectations of a 0.1% decline. In particular, core inflation, excluding food and energy price volatility, doubled to 0.6%.
Wall Street suffered its biggest fall in two years, the safe-haven dollar posted its biggest jump since the start of 2020 and two-year Treasury yields, which rise on traders’ expectations of higher interest rates. federal funds, hit their highest level in 15 years. (Reuters)
Rupee gains 36 paise to hit more than a month high on foreign inflows
The rupee appreciated 36 paise to close on Tuesday at a one-month high of 79.17 against the US dollar, tracking the dollar’s decline against its major peers and inflows of foreign funds.
On the interbank forex market, the local unit opened at 79.30 against the greenback. It saw an intraday high of 79.03 and a low of 79.33 during the session.
It eventually finished at 79.17, the highest closing level since Aug. 3. The rupee had closed at 79.53 on Monday.
The dollar index, which measures the strength of the greenback against a basket of six currencies, fell 0.40% to 107.89. (PTI)
Amazon and Flipkart will start holiday season sale from September 23
E-commerce majors Amazon and Flipkart will launch their holiday season sales from September 23.
As Amazon India will hold a 28-29 day festive season sale, the Amazon Great Indian Festival, Flipkart has announced that it will host “The Big Billion Days 2022” until the end of September.
“We will have 11 lakh vendors participating in the sale of which 2 lakh are local stores. We will deliver all usable PINs to customers. The big change this year is that it will come after two years of the pandemic. business as usual,” Noor Patel, vice president of Amazon India, told PTI.
Amazon will give 24-hour early access to its Prime members before opening the sale for everyone on September 23. (PTI)
Rising demand for services helps stabilize India’s economy in August
India’s economy showed signs of stabilizing last month, with strong demand for services helping weather headwinds of high inflation, according to a gauge of early available indicators.
Since August, Bloomberg News has changed three of the eight indicators it uses to track so-called animal spirits in the economy. It now includes electricity demand, goods and services tax collection and the unemployment rate, replacing Citi India’s financial conditions index, factory output and infrastructure. (Whole story)
Stocks fall, dollar rallies as surging US inflation implicates aggressive Fed
The dollar index rallied on Tuesday and the S&P 500 fell 4% as Treasury yields jumped after data showed U.S. consumer prices rose faster than expected in August, prompting bet on more aggressive rate hikes from the Federal Reserve.
Wall Street stock indices saw their biggest one-day percentage decline since June 2020.
It was a sharp reversal after major stock indexes rallied on Monday and the previous week as investors bet Tuesday’s data would show inflation easing and provide the Fed with an avenue to ease its policy tightening. . (Reuters)
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