Highlights:
Global:
- IMF upgrades 2023 global growth outlook to 3% from 2.8% estimated in April.
- Cooling inflation and labour market in the US support bets of an end to Fed’s rate hike cycle.
- US Nonfarm Payrolls rose 209K in June, the smallest increase in over 2 years.
- US wage growth improved to 4.4% y-o-y in June from 4.3% prior.
- Weaker-than-expected Q2 GDP growth and flatlining inflation in China raise calls for stimulus.
Domestic:
- Consumption signals mixed; rural consumption subdued.
- Kharif sowing marginally lower amid regional variations in rainfall.
- Retail inflation rose to 4.8% in June snapping a four-month declining trend.
- Share of food inflation to overall inflation rose to 44% (June) from 36% a month ago.
- CMIE investments completed and announced in Q1 FY24 were higher than a year ago period.
- Merchandise exports continued to disappoint; Services exports stayed upbeat.
- 10-year bond yield rose on account of upside risks to inflation.
- 1-year OIS edged higher to 6.80% on bets of delayed RBI rate cuts.
- Rupee appreciated amidst FPI inflows and waning dollar dominance.
- We expect INR to remain within 81-83 range by end-FY24.
