Global Data Watch
Aug 17, 2009 |
| Data Review |
|
Last |
Consensus |
Actual |
Comments |
Global |
| China Trade balance (Jul) |
$ bn |
8.2 |
9.8 |
10.6 |
Exports gained a solid 2.8%m/m, sa in July. |
| Japan BoJ meeting |
% |
0.1 |
0.1 |
0.1 |
BOJ voted unanimously to keep unsecured overnight call loan rate unchanged at 0.10%. |
| China IP (Jul) |
% oya |
10.7 |
11.7 |
10.8 |
Though lower than expected, IP still managed to rise 1.1%m/m, sa, on top of the 2.3% jump in June. |
| Euro area IP (Jun) |
%m/m sa |
0.6 |
-0.2 |
-0.6 |
In 2Q as a whole, IP fell around 11%ar, much less than the average 25%ar contraction in the previous two quarters. |
| Japan IP final (Jun) |
% m/m,sa |
5.7 |
2.4 |
2.3 |
IP is expected to increase. Strong June machinery orders pointed to an easing of the decline in corporate investment on equipment. |
| US International trade (Jun) |
$ bn |
-26.0 |
-28.3 |
-27.0 |
The June trade report showed that US exports are starting to rebound, but the trade deficit still widened because of increasing oil prices. |
| Euro GDP flash (2Q) |
% q/q |
-2.5 |
-0.2 |
-0.1 |
Euro area GDP better than expected in 2Q. German growth forecast to be 5% ar in 3Q and Euro growth now seen at 3% ar in 3Q. |
| US Consumer sent (Aug) |
Index |
66.0 |
68.0 |
63.2 |
The sentiment index declined to 63.2, the lowest level since March, probably due to job losses. |
| US IP (Jul) |
%m/m sa |
-0.4 |
1.0 |
0.5 |
The manuf prod increased 1.0%. This was the first increase in manufacturing since the recession began, excluding last October. |
| |
|
|
|
|
|
| WPI for week ending July 4 |
% oya |
-1.58 |
-1.74 |
-1.74 |
WPI declined to 33-yr low, as last year on 2nd Aug, WPI had reached the peak of 12.9%. |
| IIP for June |
% oya |
2.2 |
3.8 |
7.8 |
On sectoral basis, the growth was broad based showing that economic activities have picked up. |
Releases in bold are key releases; Out of 11 important data releases, 4 were better, 5was worse than expected and 2 were as expected.
|
| Data Review |
|
Last |
Consensus |
Comments |
| Global |
| Euro PMI Manufacturing (Aug), Aug 17 |
Index |
46.3 |
48.3 |
The Euro area manufacturing PMI made a record gain in July and the internal dynamics pointed to further increases. |
| Japan GDP 1st est (2Q), Aug 17 |
% q/q, saar |
-14.2 |
4.5 |
Real GDP likely reverted to solid growth in 2Q, after having experienced the worst post-WWII recession since 4Q07. |
| US Housing starts (Jul), Aug 18 |
Mn |
0.58 |
0.58 |
Single-family starts probably declined in July after a series of strong gains in earlier months. |
| South Africa GDP (2Q), Aug 18 |
% q/q |
-6.4 |
-3.0 |
GDP is expected to contract 3.0%q/q, saar, in 2Q09 after declining 6.4% in 1Q09. |
| US Existing home sales (Jul), Aug 21 |
Mn, saar |
4.89 |
4.95 |
Expected to be the fourth consecutive rise and, if realized, sales would be roughly back in line with the level that prevailed from the fall of 2007 to Oct 2008. |
Consensus forecasts are preliminary data, releases in bold are key releases.
|
Equity Market
Aug 17, 2009 |
Global Equity markets declined 0.2% last week. On Friday, the declines in Europe (-0.8%) and US (-1.0%) overshadowed the increase in Asian market (0.8% in Japan) and globally the market declined 0.6%. But for the month of August, global market is still up by 1.5%.
Indian Equity market
The key indices of Indian stock market ended the week with over 1.5% gain. On Thursday, the market gained 5% but failed to maintain the bullish trend. Last week, the market opened weak and the Sensex just managed to stay above 15,000 level during the first three days of the week. But on Thursday, market gained significantly on both global and domestic cues. Much higher than expected IIP numbers (7.8% yoy) for June and the announcement of draft direct tax reform which is expected to come in force in 2011 buoyed the market sentiment. But the gain was short-lived as market fell on Friday. An expectation of bad monsoon and its adverse impact on growth and rural demand hurt the sentiment.
The gains were broad based and the mid and small cap stocks gained more than the large cap stocks. On sectoral basis, all sectoral indices were in positive territory last week other than FMCG. The FMCG fell marginally by 0.1% on poor monsoon. Realty and Metal sectors rose the most with gains of 7.8% and 4.8% respectively.
Index Performance (%)
|
Last week |
1m |
3m |
6m |
12m |
| BSE Small Cap |
3.5 |
21.4 |
51.1 |
88.9 |
(9.8) |
| CNX Midcap |
2.4 |
14.6 |
45.9 |
69.6 |
2.3 |
| S&P CNX Nifty |
2.2 |
11.4 |
27.5 |
55.3 |
3.4 |
| BSE 200 |
2.1 |
11.9 |
34.2 |
66.6 |
4.7 |
| BSE 100 |
2.0 |
11.4 |
32.6 |
64.7 |
4.6 |
| BSE Sensex |
1.7 |
11.2 |
29.8 |
60.0 |
4.7 |
Sector Indices Performance
| Sectoral Indices |
Price as on
14th Aug 09 |
Performance (%) |
| Last week |
1m |
12m |
| BSE Realty |
3,963 |
7.8 |
32.3 |
(23.2) |
| BSE Metal |
12,721 |
4.8 |
23.8 |
1.0 |
| BSE Oil & Gas |
9,869 |
3.2 |
13.7 |
(3.29) |
| BSE Healthcare |
3,886 |
3.0 |
8.7 |
(9.2) |
| BSE Consumer Durable |
3,104 |
3.0 |
13.1 |
(19.8) |
| BSE Teck |
2,921 |
2.7 |
14.5 |
(4.4) |
| BSE Bank |
8,286 |
2.2 |
9.3 |
20.0 |
| BSE Auto |
5,569 |
2.1 |
21.9 |
41.6 |
| BSE Power |
2,897 |
1.7 |
9.0 |
9.4 |
| BSE Capital Goods |
12,347 |
1.6 |
7.6 |
1.7 |
| BSE IT |
3,978 |
1.5 |
19.2 |
2.1 |
| BSE PSU |
8,325 |
1.3 |
11.0 |
19.2 |
| BSE FMCG |
2,553 |
(0.1) |
6.6 |
16.4 |
Credit Market
Aug 17, 2009 |
Sovereign Yield
| 10 yr yield% |
Aug 14 |
1 wk prior |
2 wk prior |
10 yr yield% |
Aug 14 |
1 wk prior |
2 wk prior |
| India |
7.11 |
7.03 |
7.00 |
US |
3.55 |
3.89 |
3.52 |
 |
|
Global Credit markets
US Treasury yields eased tracking worse than expected economic data. Two- and ten-year US Treasury yields both declined by 25 and 34 bps to 1.07% and 3.55% respectively. |
GOI 10-yr Yield movement
 |
|
Indian Credit Market
During the week, the G-Sec yields continued to harden on additional supply concerns. RBI’s announcement that Government would issue Cash Management Bills to manage its temporary revenue mismatches had a positive impact on G-sec initially. Devolvement of G-sec auction on Friday hurt the market sentiment and the 10-yr G-sec closed at 7.11%. The overall liquidity in the market continued to remain ample. The net average LAF balance last week was around Rs. 1,24,741 cr and the overnight money market rates were in the range of 2.00%-3.30%.
Next week, the G-Sec markets are expected to take cues from G-sec auction cut-offs, OMO cut-offs, domestic liquidity and inflation numbers.
|
RBI auctions
Last week, the G-sec auction worth Rs 12,000 cr saw devolvement in two of the three securities. The cut-off yield for new 7-year G-sec (Rs 6,000 cr) was kept at 7.02%. There was a devolvement of Rs 285.55 cr in this security. The ‘6.35% GOI 2020’ (Rs 4,000 cr) saw a cut off yield 7.45%. There was a devolvement of Rs 630.00 cr in this security. The ‘7.35% GOI 2024’ (Rs 2,000 cr) saw a cut-off yield of 7.77%. Both the T-Bill auctions held last week were fully subscribed. The 91-Day T-Bill auction worth Rs 5,000 cr saw a cut-off yield of 3.36%, as compared to 3.28% seen previous week. The 364-Day T-Bill auction worth Rs 1,000 cr saw a cut-off yield of 4.17%, as compared to 3.80% seen previous auction.
Also last week, the RBI's Central Board approved the transfer of surplus profit to the Government of India amounting to Rs. 25,009 cr for the year ended 30 June’09 as against Rs. 15,011 cr for year ended 30 June’08.
Forex Reserves
Reserves dipped $402 mn to $271.239 bn as on Aug 7th due to revaluation of foreign currency assets that went down by $412 mn due to capital outflows. However, the reserves with IMF rose $10 mn.
| US$ Mn. |
Change over |
| As on Aug 7, 2009 |
Last week |
End-Mar, 09 |
End-Dec, 2008 |
| Total Reserves |
271,239 |
-402 |
19,254 |
15,271 |
| Foreign Currency Assets |
260,219 |
-412 |
18,793 |
13,616 |
Forex and Commodities
Aug 17, 2009 |
Currency Monitor
| Base currency : INR |
USD |
GBP |
EURO |
YEN |
| Aug 14th |
48.27 |
79.99 |
68.89 |
50.63 |
| 1 w prior |
47.86 |
80.18 |
68.69 |
50.17 |
| 2 w prior |
48.16 |
79.75 |
68.08 |
50.57 |
Source: RBI
Currencies: The trade-weighted US dollar slipped 0.2% last week, closing at $1.420/euro and 94.9yen/dollar. Interestingly, the dollar stumbled 2.7% versus the yen last week.
The INR on Friday depreciated by 13 paise to close at 48.27 vs USD from Thursday as equity market fell on heavy capital outflows. Dollar demand from some foreign banks also helped in the decline. INR depreciated even though USD weakened overseas. For the week, INR depreciated by 1% vs USD. Worry about poor monsoon’s impact on domestic economy and downbeat US data soured the sentiment.
Global Commodity Monitor
| In USD |
Gold |
Silver |
Crude(WTI) |
Copper |
Aluminium |
| Aug 14th (EOD) |
944.00 |
14.55 |
67.00 |
6,251 |
1,957 |
| 1 w prior |
954.95 |
14.62 |
70.93 |
6,150 |
2,020 |
| 2 w prior |
954.00 |
13.93 |
69.45 |
5,719 |
1,890 |
Source: Bloomberg
Commodities: Last week, commodities declined as losses in the energy sector brought down the asset class. Industrial metals outperformed compared to other sectors but they also went down on Friday. The global recovery theme as supported by various macro economic data will favour the industrial metals.
Crude oil fell to the lowest in more than two weeks on reduced demand, disappointing consumer-related data and rising inventories in US. The WTI one-month price of oil slumped $3.01 on last Friday to about $67/bbl—down $3.52 since last Friday. Crude oil for September delivery fell as much as 66 cents, or 1%, to $66.85 a barrel.
* REER is defined as a weighted average of nominal exchange rates adjusted for relative price differential between the domestic and foreign countries, relates to the purchasing power parity (PPP) hypothesis. Here it is basically REER on trade basis for 6 countries.
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By : Geetima Das Krishna -
Economic Research, Reliance Capital Asset Management Ltd
* Disclaimer
The information contained herein is the independent and personal view of the author and should not be construed as an investment advise or a standard investment procedure and are not the views of the Company. Neither the AMC, the Trustees, the Fund nor any of their affiliates or representatives assume any responsibility for the authenticity of such information.
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