Fixed Income Strategy 2018 Snapshots
- In June policy meeting RBI raised the repo rate by 25 bps to 6.25%.
- RBI may raise the Repo Rate from 6.25% levels, the number of hikes will depend on core inflation expectations.
- RBI will keep liquidity easy and comfortable
- Government will spends to push up economic growth even as it tries to keep down fiscal deficit.
- India inflation is unlikely to go down to 4% levels but will stay within the RBI 4% +/- 2% target range.
- RBI has changed its policy stance from accommodative to neutral and will most probably signal the end of low interest rates in the economy.
Currency Strategy 2018 Snapshot
- The global currency market is likely to witness high volatility in the remaining part of 2018
- Emerging market currencies have been collapsing over the last few months.
- The MSCI Emerging Markets Currency Index is down 3.5% since its peak in April
- The INR fell below Rs 68 levels against the USD in May 2018 and is currently trading at levels of Rs 67.15, down by around 7% so far in 2018.
Commodity Strategy 2018 Snapshots
- Gold will under perform while industrial metals out perform
- Crude Oil will stabilize
- Commodity prices continue to rise on a broad-based global recovery
- Outlook for commodities is better than what it was in the past few years.