Following the previous week, the RBI's monetary minutes anticipate a possible uptick in inflation due to uncertainty in food prices. The Repo rate had remained unchanged post the hike 0.25% hike in May 2022, as a measure to control potential inflationary pressure in economy. Notably, Indian markets surged to an all-time high of 22297.5 during Friday's trading hours on February 23rd.
In last week’s FOMC minutes, the Fed could not provide provide clear guidance on the long-awaited first-rate hike due to a very strong labor and slightly higher inflation figures. Market expectations have receded from the expectations over March, with the first rate cut now anticipated in June 2024, and further expecting 2-3 rate cuts in the latter half of this year.
Looking ahead, India's GDP growth rate data is scheduled for release on Thursday, the 29th, with expectations set at 7.3%. Deviations within a narrow range or slightly above this figure are unlikely to prompt significant market shifts. However, a substantial deviation outside the range of 6.5% to 8% could alter the Reserve Bank's expectations.
Meanwhile, in the US economy, PCE and Core PCE data are also dated for Thursday. The Personal Consumption Expenditure (PCE) index, which utilizes Fisher's index to monitor changes in the prices of goods and services purchased by households, is expected to show a month-on-month growth of 0.3%. This index is crucial for tracking the evolving costs of everyday items over time and assessing their impact on the economy.
Date : 26th Feb '24; Source - Trading Economics, Forex Factory, News
LR