FOMC Minutes

Does it make a case for a Fed rate hike in June?

The recent FOMC minutes released during the week was interpreted by markets as a signal of front-ending of rate hikes by the Fed. There was virtual unanimity in holding Fed rates in the 0.25%-0.50% band, with just one dissenting vote at the FOMC meet. But a closer analysis of the minutes of the meeting surely throws up the possibility of another rate hike this year. Continue reading

Union Budget

Why are the equity markets so thoroughly impressed?

On the day the Union Budget was announced, the Nifty touched a low of 6850. Interestingly, in the next 4 days, the Nifty bounced back nearly 650 points to close within kissing distance of the 7500 mark. This post-budget market rally is, perhaps, the best rally that we have seen in the last 10 years. In a budget that has been described as pro-rural and anti-rich, what has enthused the equity markets so much? Continue reading

China’s forex chest

How it is depleting rapidly and what it means…

The big news is that China’s forex reserves have been depleting rapidly. To begin with China had a forex chest of nearly $4.1 trillion in late 2014. That not only made China the largest reserve holder but almost 4 times the size of the second largest reserve held by Japan. The Chinese reserve was built over decades of trade surpluses. As China emerged as the factory of the world, its exports boomed and that was largely aided by a cheap Yuan. But things have been changing in the last one year… Continue reading

The Power Shift

It is shifting back from emerging markets to developed markets…

Since the term BRIC (Brazil, Russia, India & China) was first coined in 2002 by Goldman Sachs, the story of global growth has been the story of the rise of emerging markets. While Russia was driven by oil and Brazil by commodities, China and India were driven by the demographic dividends of their billion plus populations. But things are suddenly changing in the last 3 years… Continue reading

Fiscal Deficit

The question is; what happens to fiscal deficit next year?

The finance minister was emphatic in underlining that the government will meet its 3.5% fiscal deficit target in the fiscal year 2015-16. He is probably right. At the current juncture, it does look like he will be able to meet the fiscal target for the year 2015-16. There are worries on the disinvestment front. Against the target of Rs.69,500 crore, they have garnered less than half the amount. Even in the collection of direct taxes, the FM has admitted that there may be a shortfall of Rs.40,000 crore. So how will this be bridged? Continue reading

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