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Navigating Market Peaks: Why are bonds your smartest move during this rate cut cycle?

“Markets can remain irrational longer than you can remain solvent.” – John Maynard Keynes
As September is underway, Keynes’ famous words resonate deeply within the financial community.With the Federal Reserve delivering its first rate cut in years and global equity markets teetering at record highs, the financial landscape is fraught with uncertainty.
In this volatile environment, the critical question emerges: where should you place your bets? The answer might lie in bonds, the often underappreciated yet resilient anchor in the stormy seas of market volatility.
Historical trends underscore the impressive performance of bonds during Federal Reserve rate-cutting cycles. Since 1980, bond markets have consistently delivered substantial returns as rates were lowered.
Economics Times, Published :September 19 2024, 03:26 PM IST

Powell-led FOMC delivers 50 bps rate cut for first time in 4 years, eyes 2 more in 2024

US Fed Meeting Live Updates: The US Federal Reserve announced its sixth policy decision for 2024 on September 18 after a two-day Federal Open Market Committee (FOMC) meeting and slashed the benchmark interest rate by 50 basis points (bps) or (½) half a percentage point to 4.75 per cent-5 per cent for the first time in four years, broadly in line with Wall Street estimates.
US Fed policymakers see the benchmark interest rate falling by another half-point (50 bps) by the end of this year, another full percentage point in 2025, and a final half-point reduction in 2026 to end in a 2.75 per cent-3.00 per cent range. One bps is equal to one hundredth (1/100) of a percentage point.
Mint, Published :September 19 2024, 07:34 AM IST

NBFCs throng bond mkt to fund festival credit demand as bank funding slows

A number of non-banking financial companies (NBFCs) have tapped into the debt capital market ahead of the festival season to meet increasing credit demand as bank funding slows.
On Tuesday, Aptus Value Housing Finance secured Rs 300 crore at an interest rate of 8.75 per cent through bonds maturing in five years. ICICI Home Finance Company turned to the market to raise Rs 275 crore at 7.94 per cent, alongside another Rs 300 crore at 7.95 per cent, through bonds maturing in five and three years, respectively. Bids for ICICI Home Finance are expected to close on Thursday. Meanwhile, InCred Financial Services raised Rs 215 crore.
Business Standard, Published :September 18, 2024 12:31 AM IST

Bond investors debate recession risks with Fed easing finally at hand

NEW YORK, Sept 17 (Reuters) – Bond investors are more cautious and divided over prospects for recession in the world’s largest economy with the Federal Reserve poised to cut interest rates on Wednesday for the first time in more than four years.
Proponents of a soft-landing scenario said recent weak U.S. data does not suggest the economy is falling off a cliff and might not even point to recession. Some hard landing believers, on the other hand, cited worrisome trends in the jobs market that could push the economy into a deep downturn and force the Fed to aggressively slash rates.
Reuters, Published :September 17, 20243:32 PM GMT+5:30

India's exports contract 9.3% in Aug to $34.7 bn amid weak global demand

India’s merchandise exports contracted 9.3 per cent to $34.7 billion in August due to muted global demand and geopolitical challenges, data released by the commerce department showed.
Imports, on the other hand, rose 3.3 per cent to $64.4 billion during the month, leading to a trade deficit of $29.65 billion. Commerce secretary Sunil Barthwal said that a huge slowdown in China, falling petroleum prices, recession in Europe and transportation and logistics-related challenges have affected merchandise exports.
During the first three months of the financial year (April-June), exports, outbound shipments from India witnessed 5.8 per cent growth year-on-year at $109.9 billion.
Business Standard, Published :Sep 17 2024 | 4:42 PM IST

India's August merchandise trade deficit widens to $29.65 bln as exports fall

NEW DELHI, Sept 17 (Reuters) – India’s merchandise trade deficit (INTRD=ECI), opens new tab in August widened to $29.65 billion as merchandise exports fell, dragged down by rising shipping costs and a decline in global demand, data released by the government showed on Tuesday.
Economists had expected the country’s August trade deficit to be $23 billion, according to a Reuters poll. The deficit stood at $23.5 billion in the previous month.
India’s merchandise exports declined to $34.71 billion in August from $38.28 billion a year ago, while imports were at $64.36 billion, up from $62.30 billion in August 2023, government data showed.
Reuters, Published :September 17, 2024 at 03:49 PM GMT+5:30

WPI inflation eases to a four-month low of 1.3% in Aug as fuel prices soften

NEW DELHI: Wholesale price inflation eased to a four-month low in Aug compared to the previous month largely led by a moderation in prices of fuel and power, manufactured products and some vegetables.
Data released by the commerce and industry ministry on Tuesday showed inflation, as measured by the wholesale price index (WPI), rose 1.3% in Aug, slower than the 2% in July. In Aug last year the WPI rate was in the negative zone at (-) 0.5%.
The ministry said the positive rate of inflation in August, 2024 was primarily due to increasing prices of food articles, processed food products, other manufacturing, manufacture of textiles and manufacture of machinery and equipment.
The Times of India, Published :September 17, 2024 at 13:56 IST

India's forex reserves climb USD 5.25 bn to a fresh high of USD 689.24 bn

India’s forex reserves jumped USD 5.248 billion to a new all-time high of USD 689.235 billion for the week ended September 6, the Reserve Bank of India said on Friday. The overall kitty had jumped by USD 2.299 billion to a record USD 683.987 billion for the previous reporting week. For the week ended September 6, foreign currency assets, a major component of the reserves, increased by USD 5.107 billion to USD 604.144 billion, the data showed.
Business Standard, Published :September 16, 2024

RBI Isn’t Artificially Keeping Rupee Strong, Das Says

The Indian rupee’s resilience is reflecting the nation’s strong economic fundamentals and the central bank isn’t artificially bolstering the currency, Reserve Bank of India Governor Shaktikanta Das said.
The South Asian nation is attracting a lot of foreign-exchange inflows, especially after bond index inclusion, and that’s supporting the rupee, Das said in an interview to CNBC. India will be able to sustain economic growth of as much as 8% over the medium term, he added.
Bloomberg, Published :September 16, 2024 at 9:10 AM GMT+5:30

FOMC in focus this week as jumbo rate cut could boost market rally further

Commodity markets wrapped up a turbulent week (ended September 13) with a surge of optimism, driven by growing expectations of a jumbo rate cut in the upcoming FOMC (Federal Open Market Committee) meeting. The dollar fell below 101, and the yield on the US two-year Treasury note dropped to 3.56 percent, its lowest point since March 2023. This decline reflected renewed speculation about a significant 50 bps cut scheduled for September 18.
The European Central Bank (ECB) announced a 25 bps rate cut, as anticipated. However, the ECB’s Governing Council moderated expectations for further reductions in October, emphasising a data-dependent, meeting-by-meeting approach to future monetary policy decisions, pushing Euro higher against the dollar.
MoneyControl, Published : Sep 16, 2024, 07:06 IST

Fixed deposits growth outpace savings deposits growth for last two years, raising cost of funds

Kolkata: Growth in banks’ fixed deposits, also known as term deposits, which are much costlier than demand deposits, have outpaced the savings bank deposit growth for the past two consecutive fiscal years, latest data from Reserve Bank of India showed.
This pushed banks’ cost of funds up and put pressure on their net interest margin, senior bank executives said. Savings deposit rates for the five large banks ranged between 2.7% and 3% while their terms deposit rates for over one year tenure remained over 6% to 7.25% a year.
Economics Times, Published : Sep 16, 2024, 01:13 AM IST

US Fed prepares for first interest rate cut in over four years ahead of 2024 presidential elections

The United States Federal Reserve (US Fed) this week is expected to announce its first interest rate cut in over four years since 2020, months ahead of the US presidential elections scheduled in November 2024, AFP reported.
It added that Fed policymakers will debate how big the cut will be ahead of the announcement expected on September 18 (US local time) this week.
Senior Fed officials, including Chair Jerome Powell, have indicated that a rate cut is imminent, as inflation in the US eases towards the central bank’s target of 2 per cent, and as the labour market continues to cool, the report added.
Livemint, Published : Sep 15, 2024, 01:09 PM IST

Biocon Biologics is planning to raise $950 million through overseas bonds

Biocon Biologics plans to raise $950 million dollars in overseas bond sales that will be managed by lenders including Standard Chartered Bank and HSBC, said three people aware of the fundraising.
The funds will be used to refinance a large part of the $1.2-billion debt raised for the acquisition of Viatris Inc.’s biosimilars business, said the sources cited above.
Recently, the senior management of the company met with investors in Singapore and Hong Kong. Biocon has indicated plans to raise between $900 million and $1 billion with a term exceeding five years, said one of the sources mentioned above, although others are unsure about the fundraising timeline.
Economic Times, Published : Sep 14, 2024, 08:56:00 AM IST

Traders’ Big Bet on a Half-Point Fed Cut Is Back in Bond Markets

(Bloomberg) — Bond traders are once again ramping up wagers on a half-point interest-rate cut by the Federal Reserve next week, just days after that bet seemed all-but-over.
The likelihood of a 50-basis-point move climbed to 40% on Friday, up from as low as 4% earlier in the week. The repricing added to a rally in US government bonds, lifted small-cap US companies the most in three weeks and weighed on the US dollar.
Mint, Published : Sep 14, 2024, 12:16:00 AM IST

Vault Matters: Proposed project finance norms - a push towards bond markets for India Inc

As we reach closer to the second half of FY 25 there are two topics buzzing in the banking fraternity – draft project finance norms and draft liquidity coverage ratio norms. The fate of both will decide how expensive bank loans could get in the coming months. Final norms on both matters are expected soon.
While LCR is more of tightening the balance sheet, what could have a far reaching implication from the point of handing out large loans by banks and non-banks are the proposed norms for project finance.
For one, provisioning norms for such loans, that is loans which could turn bad, sealed at 5 percent is a number that is unheard of for financial institutions.
MoneyControl, Published : Sep 13, 2024, 16:06 IST

'India's growth potential is above 7.5%': RBI Governor Shaktikanta Das

India has a growth potential of at least 7.5 per cent, Reserve Bank of India Governor Shaktikanta Das said on Friday at an international forum in Singapore. This projection is slightly above the Reserve Bank of India’s estimate of 7.2 per cent growth for the current financial year, FY25.
During his address at the Bretton Woods Committee’s annual Future of Finance Forum, Das said: “I think India’s potential growth today… is about seven-and-a-half-per-cent-plus.” The forum took place in Singapore in collaboration with Swiss bank UBS, the Reserve Bank of India said.
Business Standard, Published : Sep 13, 2024, 09:18 IST

FPI investment in debt rebounds in September, FAR allocations lag

Foreign portfolio investors’ (FPI) investment in the Indian debt market has seen a notable increase in September so far, with net inflows of Rs 15,357 crore during the first eleven days of the month—a little short of the total net investment of Rs 16,421 crore in August, according to data on the National Securities Depository Limited. However, only a net total of Rs 3,328 crore was infused in government securities designated under the Fully Accessible Route (FAR) during the same period, Clearing Corporation of India (CCIL) data showed.

FPI investment in FAR securities had doubled, surpassing the Rs 2 trillion mark within nine months of the announcement of JP Morgan including Indian debt in its index. Only government bonds issued by the Reserve Bank of India (RBI) under FAR are included in the index.
Business Standard, Published : Sep 12, 2024, 19:32 IST

CPI Inflation in August At 3.65%, Second Lowest in 5 Years; IIP Grows 4.8% In July

Retail Inflation in August 2024: India’s CPI inflation in August 2024 stood at 3.65 per cent as compared with 6.83 per cent a year ago, according to official data released on Thursday, September 12. This is the second lowest in the last five years. Meanwhile, India’s industrial output growth, based on IIP, records a growth of 4.8 per cent in July 2024.
India’s retail inflation in the previous month of July 2024 had stood at 3.6 per cent.
NEWS 18, Published :Sep 12, 2024, 18:29 IST

Bond yields in India may decrease further in September': Report

In the Indian markets, there has been a sustained upward momentum with new highs being reached. This growth has been primarily fueled by substantial sector rotations that have bolstered high index levels.
Indian government bond yields are expected to see a dip owing to current domestic and global factors. So far, the global economic growth has presented a nuanced picture amidst prevailing concerns regarding inflation and tightening financial conditions. Major central banks have maintained a cautious stance towards monetary policy as they navigate uncertainties in both inflation trends and economic stability.
Business Today, Published :Sep 12, 2024, 01:59 PM

OPEC+ has postponed a tough decision it can’t put off for long

OPEC+ is like a teabag; it only works in hot water. The late Robert Mabro, an oil-market watcher, liked to say the cartel only got the job done when it was under prolonged financial pain. To judge by its latest actions, OPEC+ has yet to realize it’s in a warming kettle.
Saudi Arabia, Russia and other oil-producing nations have now agreed to delay by two months a planned output hike that was scheduled to start in October. The delay came after Brent, the oil benchmark, fell to a one-year low below $75 a barrel.
Livemint, Published :Sep 10, 2024, 03:00 PM IST

Mixed growth signals, India’s FY25 GDP may slow to 6.7%: Nomura

New Delhi: Brokerage major Nomura Tuesday forecast India’s gross domestic product (GDP) growth to soften to 6.7% in FY25, below the Reserve Bank of India’s forecast of 7.2% and downside risks to its FY26 GDP forecast of 7.2% as growth signals are currently mixed.
Catch-up in government spending and rural demand are positives, but softness in consumer discretionary demand, industrial demand and external demand are negatives, it said in a report.
Economics Times, Published :Sep 10, 2024, 06:16 PM IST

US dollar perks up as traders reduce bets on larger Fed rate cut

The dollar snapped back against the yen and other major currencies on Monday after losses last week, as investors looked ahead to key U.S. inflation data and reduced expectations for an outsized Federal Reserve interest rate cut next week.
The greenback rose for the first time in five sessions versus the Japanese currency, while rising for a second straight day against the euro.
U.S. rate futures have fully priced in a 25-basis-point rate cut at the Fed’s Sept. 17-18 policy meeting, with a roughly 29% chance of a bigger, half-percentage-point move, according to LSEG calculations. On Friday, pricing for the bigger cut rose as high as 50%.
Reuters,Published : Sept 10, 2024, 01:38 AM , GMT+05:30

Asia shares slip, but US and EU futures find a bid

Asian share markets slipped on Monday as worries about U.S. and Chinese growth weighed on sentiment, though U.S. and European stock futures did manage a bounce while bond yields came off their lows.
Data on consumer prices (CPI) from China showed the Asian giant remained a driver of global disinflation, with producer prices falling an annual 1.8% in August when analysts had looked for a drop of 1.4%.
The CPI also missed forecasts at 0.6% for the year, with almost all the rise in food prices, and goods prices up just 0.2%, pointing to subdued domestic demand.
Reuters,Published : Sept 9, 2024, 11:23 AM , GMT+05:30

Shift in US bond yields leaves investors guessing about economic outlook

Short-term US government borrowing costs have fallen below long-term costs in a reversal of the so-called “inverted yield curve”, a move that some analysts believe could herald an imminent economic downturn. The yield on the rate-sensitive two-year Treasury fell below that of its 10-year counterpart on Thursday, after data showed the US private sector added the fewest jobs in three and a half years in August. Bond yields move inversely to prices.
Financial Times ,Published 7 Sept

India's Forex Reserves Hit Fresh All-Time High of $683.987 Billion, Jump $2.3 Billion

India’s forex reserves jumped by $2.299 billion to a new high of $683.987 billion for the week ended on August 30, according to the latest data from the Reserve Bank of India (RBI). In the previous reporting week, the forex reserves had jumped $7.023 billion to a high of $681.688 billion.
Gold reserves increased by $862 million to $61.859 billion during the week ended August 30.
During the week, foreign currency assets, a major component of the reserves, increased by $1.485 billion to $599.037 billion, the data showed.Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.
News 18, Last Updated: Sept 7, 2024, 09:18 AM IST

Bank of Baroda raises Rs 5,000 crore through infra bonds at 7.26%

Bank of Baroda on Friday raised Rs 5,000 crore through the sale of infrastructure bonds, garnering long-term funds to finance demand for loans amid a slower pace of deposit growth.
The bank issued 10-year infrastructure bonds at a coupon rate of 7.26%, with the state-owned lender receiving 105 bids worth Rs 14,215 crore for the sale, debt capital market executives said. The issuance had a base size of Rs 2,000 crore and a greenshoe option of Rs 3,000 crore.
Economic Times, Last Updated: Sept 6, 2024, 08:08 PM IST

Dollar Index at one-week low amid cautious moves ahead of jobs report

The US dollar index slips to a one-week low on Friday as investors brace for US jobs data scheduled to be released later in the global day. The US Labor Department is scheduled to release its more closely watched report on employment in the month of August, which includes both public and private sector jobs. The Nonfarm Payrolls (NFP) report will play a key role in influencing market expectations about the Federal Reserve’s (Fed) policy path and determining the next leg of a directional move for the DXY. The yield on the benchmark ten-year note, which moves opposite of its price, decreased by 3.7 basis points to 3.731 percent, its lowest closing level in over a year. The dollar index also stayed cautiously lower below 101 mark, drifting lower for the third straight day and currently at 100.90, down 0.17% on the day.
Business Standard, Last Updated: Sept 6, 2024, 02:50 PM IST

Indian Bond Yields Steady As Markets Eye US Jobs Data

The benchmark 10-year yield, which closed at 6.8554%, is anticipated to move within a narrow range of 6.84% to 6.87% through Monday. This comes as India gears up to raise 290 billion rupees ($3.45 billion) through bond sales, including 120 billion rupees in 15-year bonds. Concurrently, US Treasury yields have dipped for three consecutive sessions due to weak economic data, fueling expectations of a more substantial Federal Reserve rate cut.
Finimize, Published: Sept 6, 2024

Bank of Baroda may raise up to Rs 5,000 crore through infra bonds in coming days

Bank of Baroda is likely to raise up to Rs 5,000 crore through the issuance of infrastructure bonds in coming days, as the state-owned lender looks to garner long-term funds amidst firm demand for credit.
The bank may conduct the debt sale on September 6, with the issuance likely to have a base size of Rs 2,000 crore and a greenshoe option of Rs 3,000 crore, debt capital market sources said. The bonds are likely to be of 10-year maturity.
Economic TImes, Published: Sept 2, 2024, 07:44 PM IST

Long term projects should be funded through debt market: Sanjiv Bajaj

Banks are ill suited to lend for long-term projects and their funding should ideally come from the debt market through insurance and pension money, said Sanjiv Bajaj, MD, Bajaj Finserv on Monday.
Speaking at a CII event in Mumbai, Bajaj said, “There is no reason why banks should be lending for long term projects. They are actually ill suited as there is a mismatch between assets and liabilities. This has to come from the debt market through insurance and pension money.”
Business Standard, Published: Sept 2, 2024, 04:10 PM IST

NFO Watch: Franklin Templeton Mutual Fund launches Medium to Long Duration Fund

Franklin Templeton Mutual Fund has announced the launch of Franklin India Medium to Long Duration Fund, an open-ended medium-term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 4 and 7 years with relatively high interest rate risk and relatively moderate credit risk.
The new fund offer or NFO will open for subscription on September 3 and close on September 17. The scheme will reopen for continuous sale and repurchase on September 26.
Economic Times, Published: Sept 2, 2024, 02:42 PM IST

GDP slowdown in Q1 due to lower govt spending, says RBI Governor; asserts India’s growth story intact

Reserve Bank of India (RBI) Governor Shaktikanta Das on August 31 attributed the slowing of India’s economic growth to “lower” government spending in the wake of the enforcement of the model code of conduct (MCC) for the recent Lok Sabha elections.
India’s gross domestic product (GDP) slowed to a 15-month low of 6.7 percent in April-June quarter of this fiscal against 8.2 percent in the year-ago period, official data showed.
Business Today, Published: Aug 31, 2024, 4:17 PM IST

Fed's Preferred Inflation Gauge Stays on Cooling Trend

The Bureau of Economic Analysis released the Federal Reserve’s preferred gauge of prices—the personal consumption expenditures, or PCE, price index—this morning.
Increased 0.2% month over month and 2.5% year over year vs. expectations for a 0.2% MoM increase and a 2.6% YoY increase.
Core: Increased 0.2% MoM and 2.6% YoY vs. expectations for a 0.2% MoM increase and a 2.7% YoY increase.
BARRONS’S, Published: Aug 30, 2024 · 09:31 AM EDT

India's GDP growth slows to 15-month low of 6.7% in April-June quarter

India’s economic growth slowed to a 15-month low of 6.7 per cent in April-June 2024-25, mainly due to poor performance of the agriculture and services sectors, government data showed on Friday.
The gross domestic product (GDP) expanded by 8.2 per cent in the April-June quarter of 2022-23.
India, however, remained the fastest-growing major economy, as China posted a 4.7 per cent growth in April-June 2024.
The previous low of 6.2 per cent was recorded in the January-March quarter of 2023.
Business Standard, Published: Aug 30, 2024 · 06:55 PM IST

India bond yields may inch higher as markets await weekly debt auction

Indian government bond yields are expected to edge higher in early deals on Friday as market participants await fresh supply via a weekly debt auction, as well as key domestic and US data, for directional cues.
The benchmark 10-year yield is likely to move between 6.85 per cent and 6.89 per cent till the debt auction, compared with its previous close of 6.8637 per cent, a trader with a primary dealership said.
Business Standard, Published: Aug 30, 2024 · 09:49 AM IST

RBI, European market regulator close to resolving bond settlement deadlock

The Reserve Bank of India (RBI) and the European Securities and Markets Authority (ESMA) are close to ironing out differences over the treatment of the former’s bond trading platform, a senior government official said, adding that there will be no roadblocks to trading even as the two sides look for a resolution.
“The regulators are in talks and are working towards a solution,” the official said.
Moneycontrol, Published: Aug 27, 2024 . 18:41 IST

India bond yields may inch higher ahead of over $4 bln state debt sale

Indian government bond yields may open a tad higher on Tuesday, as traders brace for higher-than-expected supply from states later in the day, while U.S. Treasury yields remained largely unchanged.
The benchmark 10-year yield is likely to move between 6.84% and 6.87%, compared with its previous close of 6.8509%, a trader with a primary dealership said.
Hindustan Times, Published: Aug 27, 2024

FPI inflows in Indian debt market cross ₹1 lakh crore mark in 2024 so far

Foreign portfolio investors (FPI) have infused ₹11,366 crore in the Indian debt market so far in August, pushing the net inflow tally in the debt segment to more than the ₹1 lakh-crore mark.
According to data from National Securities Depository Limited (NSDL), FPIs have poured a substantial ₹1,02,354 crore in the Indian debt market in 2024 so far. In August alone, FPIs invested ₹11,366 crore so far, following net investments of ₹22,363 crore in July, ₹14,955 crore in June and ₹8,760 crore in May.
Livemint, Published: Aug 26, 2024 · 01:44 PM IST

Even in FD, your money is not 100% safe, investors should know these 5 risk factors of Fixed Deposit

Fixed Deposit is still the preferred investment option for most people because people feel that their money is safe in it. If you also have such a misconception, then get rid of it because it is not so at all.FD is indeed much safer than the market, but even in this your money is not 100% safe. Most people are not aware of this. Know here 5 risk factors of Fixed Deposits.
Usually, people consider bank FD completely safe and invest their large amount in it. Although the money in FD is safe, but if the bank defaults in any condition, then only the deposit of up to 5 lakhs of the investors is safe because DICGC guarantees insurance of only up to Rs 5,00,000 on bank deposits.
Dailyhunt , Published: Aug 14 2024

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