In the past week, despite the absence of any significant economic catalysts, the Indian markets had corrected slightly more than 2%, a divergence from the relatively bullish trend observed in major global economies.
Looking ahead to this week, the focus shifts to the United States where we anticipate the release of the Producer Price Inflation (PPI) figure on Tuesday, the 14th of March, with an expected rate of 0.2%. Additionally, we have Federal Reserve Chairman Powell speech on the same day.
On Wednesday, (15th May) we have the inflation and core inflation numbers for April, with market expectations at 3.5% for inflation and 3.7% for core inflation. Simultaneously, the retail sales data for April is projected to show a growth rate of 0.3%, following a 0.7% expansion in March.
Given the backdrop of a weaker GDP quarter and a labor market under pressure, analysts are closely monitoring whether inflation aligns with expectations. Such alignment could provide the Federal Reserve with the confidence to maintain its current stance of cutting interest rates later this year. However, if inflation exceeds forecasts, it would curious scenario to observe Fed's strategies to combat inflationary pressures with weakening economy.
Turning to the Indian economy, this week commences with the release of Consumer Price Index (CPI) data on Monday, with expectations set at 4.75%. On Tuesday, attention shifts to the Wholesale Price Index (WPI) data, with analysts forecasting a rate of 0.7%. However we can anticipate that the inflation data in the United States will exert a greater influence on the Indian markets than the domestic data.
Date : 12th May '24; SourceĀ - Trading Economics
LR