Heres a lowdown on top macro triggers that may move market on Friday. This report was compiled from agency feeds.
WPI Inflation Hits 14-month High
A rebound in food inflation and a jump in fuel prices in May led to wholesale inflation in the country rising to 4.43%, from 3.18% in April, its fastest uptick in 14 month. The WPI was at 3.6% in April this year and 2.26% in May last year. Government data released on Thursday revealed that inflation in the fuel and power basket rose sharply in May to 11.22% from 7.85% in April, as prices of domestic fuel increased in line with rising global crude oil rates. Inflation in vegetables climbed to 2.51%, with potato inflation at a peak of 81.93%.
Trump's China Tariffs Expected Today
Trump is due to unveil revisions to his initial tariff list targeting $50 billion of Chinese goods on Friday. The list will contain 800 product categories, down from 1,300 previously. Commerce Secretary Wilbur Ross this month met Chinese officials in Beijing and brought back a Chinese proposal to buy around $70 billion worth of additional commodities and manufactured goods. But that offer has not been accepted by Trump. If Washington adopts tariffs, Beijing is expected to hit back with its own duties on U.S. imports, including soybeans, cars, chemicals and planes.
Rollback of OPEC Production Cut Inevitable: Saudi
Saudi Arabias Energy Minister Khalid al-Falih said in Moscow on Thursday that it is “inevitable” that OPEC and partners will agree next week to gradually roll back some of the production cuts that have been in place since January 2017. Russia and Saudi Arabia are leading a campaign to justify rolling back some of the OPEC/NOPEC production cuts. Meanwhile, India may seek US exemptions to buy Iranian oil and work towards setting up an alternative payment mechanism to protect its trade with the Islamic Republic in the wake of US sanctions against Tehran. After declining for a fortnight, petrol and diesel prices have hit a pause button with rates remaining unchanged for the second consecutive day on Thursday.
ECB to End Bond Buying by Dec, Keeps Rates at Record Low
The European Central Bank said on Thursday it will end its unprecedented bond purchase scheme by the close of the year, taking its biggest step in dismantling crisis-era stimulus a decade after the start of the euro zone's economic downturn. Signalling that the move would not mean rapid policy tightening in the coming months, the bank also said that interest rates would stay at record lows at least through the summer of 2019, suggesting protracted support for the economy, even if at a lower level. The new guidance prompted the euro to reverse initial gains made on the announcement and fall to 87.82 pence.
More EM Currencies Stumble
The brutal tumble of Argentinas peso added to the list of concerns over the ability of developing economies to defend their currencies as the era of cheap money wanes. The Argentine peso slumped more than 6% on reports of changes at the countrys central bank and after truck drivers began a strike. The Brazilian real — dropped a fourth day as the impact of a massive sale of foreign-exchange swaps was short lived.
Gold Discounts Widest in India
Gold discounts in India were at their widest in nine months this week as higher domestic prices tempered retail purchases, while buying in other Asian centres remained subdued amid a lack of significant momentum in global prices.Dealers in India were offering a discount of up to $7.50 an ounce over official domestic prices this week. Gold futures were trading at around Rs 31,344 per 10 grams, not far from Rs 31,620 hit in April, their highest since August 2016. Gold imports into India could drop by 18% in 2018 from a year ago. Benchmark spot gold prices continued to move in a narrow range this week, with investors remaining cautious in the run up to a historic U.S.-North Korea summit and the U.S. Federal reserve meeting earlier in the week.
May's Brexit Compromise Hits Snag
British Prime Minister Theresa May failed on Thursday to win around pro-EU lawmakers in her party over parliaments role in the Brexit process, raising the risk of defeat in lower house votes next week. The row centres on what say parliament will have over any final Brexit deal agreed with Brussels. Some lawmakers want greater powers to direct the governments negotiating strategy than have been so far offered. Earlier this week, she agreed to seek a compromise with the rebellious Conservative lawmakers, avoiding a House of Commons defeat on the final wording of the European Union (Withdrawal) Bill. Her minority government still needs support from the rebels to pass that bill and win future votes on more than 10 separate pieces of legislation needed to prepare for Brexit.
THESE MAY ALSO MOVE MARKET
Srikrishna to Probe Conflict Charges Against Kochhar
Former Supreme Court judge BN Srikrishna will conduct an investigation into various allegations of impropriety against ICICI Bank chief executive Chanda Kochhar. The bank had said it would be instituting an inquiry into the accusations at the end of May. “The board felt he would be the best person to conduct this inquiry. He has accepted the request,” said a person with direct knowledge of the development.
ICICI Bank Drags Punj Lloyd to NCLT
Private sector lender ICICI Bank NSE -has initiated forensic audit against Punj Lloyd, ET Now reported. The bank has appointed TR Chadha of Chadha & Co as forensic auditor for Punj Lloyd. The move comes after the bank dragged the company to the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against the company under the Insolvency and Bankruptcy Code. The company owes Rs 825 crore to ICICI Bank.
DoT to Seek Rs 2.1K cr Guarantee to Clear Voda-Idea Merger
The Department of Telecom (DoT) will seek a bank guarantee of around Rs 2,100 crore for clearing Idea Cellular planned merger with Vodafone India, a government source said yesterday. Vodafone and Idea will have to give undertaking of clearing dues that are sub-judice as per decision of the courts, the source said.
AirAsia: Tata Trusts Reposes Faith in Venkataramanan
Rupee Up: The rupee on Thursday withstood the headwinds of CAD worries and a hawkish Federal Reserve rate hike to close higher by 3 paise at 67.62 against the US currency, cutting short its two-day decline.
Bond Yields up: Government bonds (G-Secs) slipped on selling pressure from banks and corporates. The 7.17% 10-year benchmark bond maturing in 2028 declined to Rs 94.87 from Rs 94.96, while its yield inched up to 7.94% from 7.93%. The 6.68% government security maturing in 2031 went-down to Rs 88.46 from Rs 88.5675, while its yield edged up to 8.12% from 8.10%. The 6.84% government security maturing in 2022 slid to Rs 95.80 from Rs 95.89, while its yield gained to 7.97% from 7.94%. The 8.27% government security maturing in 2020 decreased to Rs 101.25 from Rs 101.26, while its yield inched up to 7.58% from 7.57%. However, the 7.80% government security maturing in 2021 rose to Rs 100.07 from RS 100.05, while its yield held stable to 7.77%.
Call Rates Down: The overnight call money rates finished lower to 6.00% from Wednesday's closing level of 6.05%, it resumed higher at 6.25% and moved in a range of 6.25% and 6.00%.
Liquidity: The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 4,176 crore in 7-bids at the overnight repo operation at a fixed rate of 6.25% as on Thursday, while it sold securities worth Rs 8,779 crore in 43-bids at the overnight reverse repo auction at a fixed rate of 6.00% as on June 13.