INR is trading lower today, in line with other Asian currencies

Global indices closed higher, with Hang Seng and Nikkei registering maximum gains

Dipanwita Mazumdar

Economist,

Bank of Baroda 

Mumbai, November 16, 2023: US economy continued to show some softening. Following moderation in CPI data, advance retail sales also fell by 0.1% on MoM basis from 0.7% increase seen in Sep’23. PPI declined by 0.5% against 0.5% increase in Sep’23. Core PPI remained flat. Thus all indicators are pointed towards the fact that Fed rate hike cycle has already peaked. Even in UK, inflation dropped to its lowest level in 2 years, retail price index also moderated. House price index of the region fell by 0.1% in Sep’23 against 0.8% increase in Aug’23. In China as well, new home prices fell by 0.4% on MoM basis. In Japan, exports growth have moderated to 1.6% from 4.3%, while imports fell at a softer pace by 12.5% from 16.3% decline in Sep’23. On domestic front, exports edged up by 6.2%, led by non-oil exports. Imports also have risen sharply by 12.3%.

• Global indices closed higher, with Hang Seng and Nikkei registering maximum gains. Signs of slowdown in US economy (PPI at 2 year low) increased speculations around possibility of Fed rate cuts next year. Sensex too ended in green, led by realty, tech and auto stocks. However, it is trading lower today, in line with other Asian stocks.
• Except INR and CNY (higher), other global currencies ended lower. DXY rose by 0.3% following mixed macro data points from the US (decline in PPI, increase in mortgage applications). GBP fell, despite UK CPI slowing to 2-year low in Oct’23. INR was up by 0.2%, owing to continued drop in oil prices. However, it is trading lower today, in line with other Asian currencies.
• Global yields closed mixed as investors are looking for direction amidst host of macro data releases. Despite softening of major macro data points, US 10Y yield rose by 8bps due to some correction in last session’s steep fall. Similar thing was noticed for UK and Germany’s 10Y yield. India’s 10Y yield fell by 6bps, tracking US CPI data. It is trading flat today.

(Disclaimers: 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.)