Do it yourself

Key economic trends (Elara Capital) ·          Deflationary impulses seem entrenched in the global economy. We believe global inflation may surprise on the downside through rest of CY23E. ·          We see the Fed pausing even in July 2023 meet – Expect the first rate cut by the Fed in Dec-23. ·          Historically, equities perform better in a hike cycle than a cut cycle. Bonds are a better bet in run up to rate cut cycle. Gold is the preferred commodity asset through both hike and cut cycles. The USD-INR usually fails to capitalize on the overall EM FX risk on sentiment in the run-up to a rate cut by the Fed. ·          Deflationary producer prices in China suggest weakening growth in G4 – the US, the EU, the UK and Japan. We do not rule out a sub 5% GDP growth in China in 2023E. (base case 5.2%) ·   ...

 Notwithstanding the buoyancy in stock market, the economy has shown some clear signs of fatigues in February. The post lock down recovery from September onwards appears to be pausing, as pent up consumer demand has subsided and rise in raw material prices has dampened the sentiments. Some signs of economy pausing could be read from the following: (a)    GST payments in February (for collections in January) have declined after rising for three consecutive months. (b)    E-Way collection in February were also much below the December levels. (c)     Exports have been mostly flat for the month of January and February; while imports have declined from the December levels. (d)    Non food credit growth slowed down further in January. ·          The Industrial credit contracted -1.3% in January. The contraction was led by large industrial credit, which constitutes ~82% of industrial credit and ...