The Last week's US inflation reading on 10th came in at 0.4% MoM rise, with the core inflation rising at 0.4%, surpassing the estimated 0.3% for both. Although it's just a 0.1% difference, in percentage terms, it represents a 33% increase. The recent minutes from the Fed's meeting on the same day indicated that a rate cut in June is unlikely, given the strong growth numbers from the previous week (last week of March) and the persistent inflationary pressures. Following the release of the inflation figures on April 10th, the US 10-year yield breached the psychological barrier of 4.5%.

For this week, we saw an uptick in retail sales data, with the aggregate measure of sales of retail goods and services over the month rising by 0.7%, exceeding the estimated 0.4% today (15th April). No other significant data is expected from the US this week.

Meanwhile, the Indian economy continues to demonstrate significant stability, with YoY inflation at 4.85%, lower than the expected 5%. The month-on-month inflation remained at 0%, when market forecast of 0.2%. Despite these optimistic numbers, I have concerns regarding whether the economy's basket of goods accurately reflects the prevailing economic conditions, as consumers face pressures from paying higher prices to the general commodities than when compared to 12-18 months ago.

Looking ahead to this week, we have the WPI data, which indicates a year-on-year increase in wholesale market prices of 0.53%. Later this week, we have data on money supply and bank lending and borrowing are expected on Wednesday (April 17th) and Friday (April 19th). Along with it, the country is gearing up for nationwide elections conducted on phases, which commences from Friday (April 19th).

In addition to the usual geopolitical tensions, Iran's firing of around 300 missiles at Israel on April 14th has stirred concerns about global conditions. We'll delve into this in more detail next week.

Date : 15th Apr '24; Source - Trading Economics, Reuters, Forex Factory

LR