India’s 10Y is trading tad higher today at 7.23%


In UK, retail sales weakened and slid by 0.3% in Oct'23 (MoM basis) far lower than expected and ex-petrol, the sales volume were down by 0.1%.


Jahnavi Prabhakar,

Economist,

Bank of Baroda 

Mumbai, November 20, 2023: Investors across the globe brace for the likelihood of the US interest rates peaking. It was stated by Fed official Mary Daly that Fed needs to be ‘patient and resolute’ and ‘additional firming is not off the table’. Another Fed official, Austan Goolsbee added that he remains confident of the Fed meeting its inflation target as he expects easing of housing price pressure. A lot more clarity on economic and interest rate projections will be seen in the next policy meet. Separately, both building permits and housing starts data rose more than expected on a MoM basis to 1.1% and 1.9% respectively in Oct’23. On the other hand, homebuilder confidence dropped in Nov’23, though early signs of mortgage rate lowering may improve its outlook. In UK, retail sales weakened and slid by 0.3% in Oct’23 (MoM basis) far lower than expected and ex-petrol, the sales volume were down by 0.1%.

  • Global stocks ended mixed. Investors monitored commentary by Fed officials and awaited clear guidance on interest rate expectation. European indices ended in green supported by easing of price pressure. India, Sensex ended in red led by losses in banking and oil & gas stocks. It is trading lower today, while other Asian stocks are trading higher.
  • Except INR (flat), other global currencies ended higher. DXY fell by 0.4% as US economy is showing signs of slowdown in Q4 and there are expectations of Fed rate cut next year. JPY gained the most, reflecting safe-haven demand. INR ended flat, even as oil prices rose by 4%. It is trading higher today, in line with other Asian currencies.
  • Global yields closed mixed. Investors are pausing to assess incoming macro data from the US (housing). Yield curve in the US remains inverted and near its trough level, as analysts fear risks of slowdown in Q4. In UK, yields fell as retail sales slumped. India’s 10Y yield was down by 2bps to 7.22%, following global cues. However, it is trading tad higher today at 7.23%.

(The views expressed in this research note are personal views of the author(s) and do not necessarily reflect the views of Bank of Baroda. Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/ purchase or as an invitation or solicitation to do so for any securities of any entity.)

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