In February, there was anticipation for clearer insights on the subject of potential rate reductions from the Federal Reserve. Likewise, the stronger labour market and slightly elevated inflation figures last week diminished the likelihood of rate cuts during the upcoming Fed rate decision on March 20th. Looking ahead to the upcoming week, the release of FOMC minutes on Thursday is expected to offer a clearer perspective on the Fed's stance regarding inflation and the upcoming elections in November. A dovish tone in the meeting minutes could lead to a market (US) rally in which NASDAQ, S&P and Dow are a few fractions away from their all-time peaks.

Shifting focus to the Indian economy, last week's inflation data indicates a positive trajectory, with the Year-over-Year Wholesale Price Index (WPI) at 0.27% and the Consumer Price Index (CPI) at 5.1%, comfortably within the Reserve Bank of India's (RBI) target range of 2% to 6%. The RBI has maintained the Repo rate at 6.5% this month as part of its efforts to contain inflation around 4%. India is scheduled to release its monetary meeting minutes on the 22nd, which I anticipate will shed light on the economic conditions that could impact interest rates.

Date : 19th Feb '24; Source - Trading Economics, Forex Factory

LR