People School

  Dear Reader, Welcome to this week's edition. In our previous issue, we discussed how bond markets reacted to hawkish Fed minutes and a strong private jobs report, causing bond yields to rise. However, the sentiment shifted later in the week as the US non-farm payrolls report fell below expectations. This brought back smiles to investors' faces, and their optimism continued into this week. Global food inflation remained largely under control in June, as indicated by the decline in the FAO food price index. However, domestic food inflation saw an increase, with food prices rising by 2.5% on a month-on-month basis. Notably, pulses and vegetable prices experienced sharp increases. While the monsoon tracker highlighted an improvement in the uneven rainfall situation, the risk to agriculture still persists. In domestic inflation data, the positive aspect was a decline in core inflation. An analyst, pointed out that while this was good news for inflation-watchers, the US infla

Welcome to our weekly newsletter, where we bring you the latest insights and trends from the world of finance. This week, our focus is on the upcoming quarterly earnings season, with particular emphasis on the banking sector. It appears that listed firms are poised to deliver another impressive set of numbers, although the pace of growth may vary across sectors. Amidst the noise and excitement, we have identified two key data points that can provide valuable insights for investors. Data Point 1:   Loan Interest Rates The share of loans with interest rates of 9 percent and above has risen to 56.1 percent as of January-March FY23, up from 39 percent in the previous quarter (FY22 Q4). This data point highlights the scope for bank earnings this season. Banks generate revenue by charging interest on loans they provide and paying interest on deposits they receive. The difference between the two is their earnings. While the potential for further lending rate increases is limited, as much of

Dear readers, With the first half of the year behind us, it's time to reflect on the current state of the markets and anticipate what lies ahead. Benchmark indices across major markets have witnessed substantial gains since the beginning of the year. In India, the Nifty has been reaching new heights, capturing investors' attention. A closer look at the MSCI country indices provides valuable perspective. As of June 27th, 2023, the MSCI India index in dollar terms has risen by 2.7 percent year-to-date. Comparatively, Korea has surged by 16.2 percent, and Mexico by 26.6 percent. However, the performance of MSCI China leaves much to be desired. The question arises: Are the markets rallying due to high expectations for the remainder of the year?  Inflation is on a downward trajectory, and rate hikes have either occurred or are nearing their peaks. Systematix Institutional Equities notes that the markets are factoring in a "hyper goldilocks scenario," assuming that

Dear Readers, Welcome to our weekly newsletter, where we provide you with the latest insights and updates on economic developments. Let's dive into the highlights of the Reserve Bank of India's (RBI) monetary policy committee's June meeting and its implications for the economy. The minutes of the meeting revealed that the committee members acknowledged the positive progress in both growth and inflation. However, they emphasized that the RBI should not become complacent despite the cumulative 250 basis points policy rate hikes and should remain vigilant in ensuring price stability. While the past rate hikes are gradually impacting the economy, the central bank still needs to exercise caution and avoid any drastic shifts in policy. Economists have labeled the June policy as a "Goldilocks" one, indicating a favorable balance between inflation and growth. The outlook for growth is more optimistic than before, and inflation appears less daunting. However, the MPC

  Dear Readers, In this week's newsletter, we delve into the escalating battle in India's domestic skies as IndiGo , the leading airline, secures a ground-breaking aircraft deal. IndiGo 's recent agreement with French aerospace giant Airbus for the purchase of 500 aircraft has set a new record in the aviation industry. Not only is this the largest-ever single aircraft order placed by any airline with Airbus , but it also signifies a defining moment in aviation history. Industry veterans and analysts emphasize that IndiGo 's deal is commercially significant, as it secures delivery slots for the next decade. Such a massive order empowers customers to negotiate commercially viable terms, including engine selection, aircraft type mix, and pricing. With this milestone order, IndiGo has soared above Tata-owned Air India , which had surprised the industry with its turnaround plans and a 470-aircraft order placed with Boeing and Airbus earlier this year. Post-pandem

Dear Readers, Welcome to our weekly newsletter, where we bring you the latest insights and updates on global central bank actions, economic indicators, and market trends. This week, central bankers made interesting moves, ranging from skipping to hopping, leaving investors and markets curious about the future. Central banks have been engaged in lively debates about their strategies. Shaktikanta Das of the Reserve Bank of India (RBI) recently skipped for the second time, while Jerome Powell of the Federal Reserve may follow suit next week, although his actions have been unpredictable. In contrast, Bank of Canada Governor Tiff Macklem preferred to hop this week, implementing a small 25 basis point increase. Similarly, the Reserve Bank of Australia's Chief Philip Lowe surprised the markets by executing two small jumps of 25 basis points each, contrary to the expected skip. Meanwhile, the South African central bank's 50 basis point raise last month could be seen as a significan