•Fixed Income
The New 10-Year Benchmark GOI 7.10 2034 traded between 7.10% – 7.17% during this week.
The Old 10-Year Benchmark GOI 7.18 2033 traded between 7.14% – 7.20% during this week, tracking movement in US Treasury Yields and FED Meeting.
•Auction Highlights
RBI conducted the Auction for G-sec, SDL, and T-Bill for the aggregated amount of INR 28,000, INR 14,700 Crore, and INR 27,000 Crore, respectively.
G-sec Cutoff:
7.33% GS 2026: 100.41/7.1460%\u0009
7.23% GS 2039: 100.29/7.1973%
7.34% GS 2064: 100.55/7.2971%
SDL Cutoff:
08 Years: PN 7.54%
10 Years: AS 7.54%, HR 7.52%, RJ 7.52%
12 Years: AP 7.53%, PN 7.53%
13 Years: PN 7.53%, RJ 7.52%
15 Years: RJ 7.52%
17 Years: AP 7.51%
20 Years: AP 7.49%, RJ 7.49%, TN 7.49%
26 Years: KL 7.47%
T-Bill Cutoff:
091 Days: INR 12000 Crore 98.2854/6.9972%
182 Days: INR 7000 Crore 96.6090/7.0393%
364 Days: INR 8000 Crore 93.4053/7.0797%\u0009
•Commodities:
1)Brent Crude Oil: $82.81-$89.29 (Per barrel)
2)WTI Crude Oil: $77.95-$83.91 (Per barrel)
3)Gold: INR 7,151-INR 7,260 24 Carat (1 Gram)
4)Silver: INR 83,000-INR 84,000 (1 KG)
•US Treasury Yield:
1)US 2 Years Treasury: 4.76%-5.04%
2)US 5 Years Treasury: 4.45%-4.72%
3)US 10 Years Treasury: 4.44%-4.69%
•Corporate Bond Highlights
AAA 5 Years Bond traded between 7.70%-7.75% this week.
AAA 10 Years Bond traded between 7.80%-7.84% this week.
•New Issuances:
CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LIMITED
Ratings: AA+/Stable by ICRA & INDIA Ratings; Issue Size: 500 + 500 Crs; Maturity Date: 30/04/2029.
Allocated 504 Crs at 8.59%
SMFG India Credit Company Limited
Ratings: AAA by ICRA; Issue Size: 500 + 250 Crs; Maturity Date: 15/09/2025.
Allocated 500 Crs at 8.30%.
KOTAK MAHINDRA PRIME LIMITED\u0009
Ratings: AAA/Stable by ICRA & CRISIL; Issue Size: 275 +375 Crs; Maturity Date: 18/08/2027
Allocated 277 Crs at 8.13%
SUMMIT DIGITEL INFRASTRUCTURE LIMITED
Ratings: AAA/Stable by ICRA & CRSIL; Issue Size: 600 + 0 Crs; Maturity Date: 01/05/2029.
Allocated 600 Crs at 7.89%
MUTHOOT FINANCE LIMITED
Ratings: AA+/Stable by CRISIL; Issue Size: 190 + 0 Crs; Maturity Date: 03/05/2027
Allocated 190 Crs at 8.95%
Ratings: AA+/Stable by CRISIL; Issue Size: 250 + 250 Crs; Maturity Date: 03/05/2029
Allocated 420 Crs at 9.03%
ICICI HOME FINANCE COMPANY LIMITED
Ratings: AAA/Stable by CARE; Issue Size: 150 + 250 Crs; Maturity Date: 02/08/2027
Allocated 160 Crs at 8.07%
TATA REALTY AND INFRASTRUCTURE LIMITED
Ratings: AA+/Stable by ICRA; Issue Size: 225 + 0 Crs; Maturity Date: 03/05/2026
Allocated 225 Crs at 8.20%
BAJAJ FINANCE LIMITED
Ratings: AAA/Stable by CRISIL & INDIA Ratings; Issue Size: 500 + 2500 Crs; Maturity Date: 10/05/2027; Allocated 1035 Crs at 8.15%
Ratings: AAA/Stable by CRISIL & INDIA Ratings; Issue Size: 200 + 1000 Crs; Maturity Date: 02/05/2034; Allocated 328.50 Crs at 7.93%
•News Highlights
INDIA
1)The Reserve Bank of India announced that the Centre plans to buy back Rs 40,000 crore worth of government securities on May 9, the first such repurchase since 2018. The unexpected move is also seen bringing down yields on short-term government bonds, as the three securities that the government has chosen to buy back are all maturing within six to nine months.
2)India’s foreign exchange reserves saw a decline of $2.41 billion to $637.92 billion as of April 26, according to the latest data from the Reserve Bank of India (RBI). This follows a previous decrease of $2.83 billion to $640.33 billion for the week ending on April 19, 2024.
3)India’s services exports decelerated in FY24 to a three-year low, with a modest increase of 4.9 per cent to $341.1 billion, data released by the Reserve Bank of India showed. Net services exports grew at a robust pace of 13.6 per cent to $162.8 billion as services imports contracted 2 per cent to $178.3 billion during the financial year ended March 31.
4)Fundraising by banks through certificates of deposits (CDs) declined by 74% in April compared with March as liquidity tightness in the banking system eased and demand for loans moderated. Banks raised Rs 32,860 crore in April compared with Rs 1.27 trillion in March through CDs, data from Prime Database show.
5)India’s services exports declined 1.3 per cent in March to $30 billion while imports fell by 2.1 per cent to $16.61 billion, according to a report by the Reserve Bank of India released on 2nd May 2024. As per RBI’s data on India’s international trade in services, the trade surplus during March 2024 was USD 13.4 billion.
6)The headline Purchasing Managers’ Index (PMI), released by HSBC, slipped to 58.8 in April from a 16-year high of 59.1 recorded in March. Indian manufacturing slowed down a bit in April but growth stayed robust to signal the second-best improvement in the sector’s health in three and a half years.
7)Paris-based global agency Organisation for Economic Co-Operation and Development (OECD) has upgraded India’s GDP growth forecast by 40 basis points to 6.6% for FY2024-25. The GDP forecast for FY25 also remains the same at 6.6%.
8)Unified Payment Interface (UPI) transactions declined in volume and value in April by 1 per cent and 0.7 per cent, compared to March 2024. Transactions stood at Rs 19.64 trillion in terms of value, down from Rs 19.78 trillion in March. There were 13.3 billion transactions in April, compared to 13.44 billion in March.
9)Data for April revealed that FIIs sold shares worth Rs 35,692.19 crore, while DIIs bought shares worth Rs 44,186.28 crore. Despite these divergent trends, Indian indices sustained positive returns in April, with the Nifty yielding 0.65% and the Sensex rising by 0.63% in the holiday-shortened month.
10)After 2 straight months of inflows, foreign portfolio investors (FPIs) turned sellers in April. FPIs sold Indian equities worth ₹8,671 crore during the month on the back of a rise in US bond yields and higher crude oil prices.
11)India has cut its windfall tax on petroleum crude to 8,400 Indian rupees ($100.66) a metric ton from 9,600 rupees with effect from May 1, the government said on 30th April 2024.
12)A recent report by World Gold Council (WGC) revealed that gold demand in India saw a significant rise by 8 per cent, reaching 136.6 tonnes in the January – March quarter (Q1) in 2024. This rise was supported by a robust economic backdrop, despite gold prices reaching historic highs. The increase in demand was further fueled by the Reserve Bank of India’s (RBI) robust gold purchases. The central bank purchased over 19 tonnes of gold during the initial quarter of the current calendar year 2024 (Q1-CY24 / Q4-FY24), surpassing the 16 tonnes it purchased throughout the entirety of 2023, as outlined in the WGC report.
13)Goods and services tax (GST) collection touched a record ₹2.10 trillion in April, reflecting robust economic growth. This is also the first time GST collection has crossed the ₹2 trillion mark since the unified indirect tax regime was rolled out seven years ago. “This represents a significant 12.4% year-on-year growth, driven by a strong increase in domestic transactions, up 13.4%, and imports, up 8.3%,” a finance ministry statement said.
14)The Asia-Pacific region will grow less slowly than previously feared, the International Monetary Fund (IMF) said on 30th April 2024, reflecting an improved outlook for two of the region’s largest economies, China and India. “We have raised our regional growth forecast for this year to 4.5%, up 0.3 percentage point from six months earlier, after a 5% expansion in 2023. The revision reflects upgrades for China, where we expect policy stimulus to provide support, and India, where public investment remains an important driver, making it the world’s fastest-growing major economy,” the IMF report said.
15)India recorded about 131 billion UPI transactions with a total value of Rs 200 lakh crore in FY24, finance minister Nirmala Sitharaman said. In FY23, about 83.7 crore transactions worth Rs 139 trillion were done through UPI, National Payments Corporation of India (NPCI) data stated.
16)The growth in output of eight key infrastructure industries — known as the core sector — slowed to 5.2 per cent year-on-year (Y-o-Y) in March from 7.1 per cent in February on the back of a sequential deterioration recorded by five of its constituents.
17)Indian economy will likely expand 6.8% in the current fiscal as public investment remains the primary growth driver, the International Monetary Fund said in its Regional Economic Outlook for Asia and Pacific.
WORLD
1)Federal Open Market Committee (FOMC) votes unanimously to leave benchmark rate unchanged in target range of 5.25%-5.5%, a two-decade high, for sixth straight meeting; adds new sentence to statement noting, “In recent months, there has been a lack of further progress toward the Committee’s 2% inflation objective.” The likelihood of a rate cut by the Fed in June and July is low while those odds for the September meeting dipped below 55%.
2)US Initial Jobless Claims for the week ending April 27 remained steady at 208K, unchanged from the previous week and lower than the anticipated 212K.
3)The US Bureau of Labor Statistics (BLS) announced the number of job openings on the last working day of March to be 8.488M, below the anticipated 8.690M mark.
4)According to Automatic Data Processing (ADP), private sector jobs in the US increased by 192K in April, slightly surpassing the projected increase of 175K jobs.
5)The US trade deficit narrowed slightly to $69.4 billion in March from an upwardly revised $69.5 billion in February. This decrease reflects a decline in both exports and imports.
6)U.S. manufacturing growth showed signs of stalling in April. Both major purchasing managers’ indexes (PMIs) dipped. The S&P Global PMI fell to 50.0, down from 51.9 in March. The ISM Manufacturing PMI also contracted, registering 49.2 compared to 50.3 in March.
7)Nonfarm Payrolls (NFP) in the US rose 175,000 in April, the US Bureau of Labor Statistics (BLS) reported on 3rd May 2024. This reading followed the 315,000 increase (revised from 303,000) recorded in March and came in below the market expectation of 243,000.
8)The jobs report showed that the U.S. Unemployment Rate edged higher to 3.9% from 3.8%, while the Labor Force Participation Rate held steady at 62.7%. Additionally, wage inflation, as measured by the change in the Average Hourly Earnings, declined to 3.9% on a yearly basis from 4.1%.
9)The ISM Services PMI in the US dropped sharply to 49.4 in April of 2024 from 51.4 in the earlier month, reflecting the first contraction in services sector activity since December of 2022, and surprising market expectations of 52.
10)US S&P Global Composite PMI declined to 50.9 in April’s flash estimate from 52.1, showing that the business activity in the US’ private sector continued to expand, albeit at a softer pace than in March. S&P Global Manufacturing PMI dropped to 49.9 from 51.9 in the same period, highlighting a contraction in the manufacturing sector’s business activity. Finally, S&P Global Services PMI edged lower to 50.9 from 51.7.
11)U.K. manufacturing activity contracted in April. The S&P Global PMI dipped to 49.1, down from 50.3 in March. This indicates a slowdown in the sector after a brief period of expansion.
12)The Eurozone Consumer Price Index (CPI) came in at 2.4% year-on-year (YoY) in April, matching both the forecast and the previous reading of 2.4%. This suggests stable inflation levels in the Eurozone.
13)Eurozone manufacturing activity contracted at a faster pace in April as the HCOB Manufacturing PMI dipped to 45.7, down from 46.1 in March.
14)The eurozone unemployment rate remained at a historic low of 6.5% in March for the fifth consecutive month. Compared with February, the number of unemployed decreased by 51k.
15)German Consumer Price Index (CPI) inflation rose to 0.5% m/m in April, up from the previous month’s 0.4% but missing the forecast 0.6%. Germany’s y/y Harmonized Index of Consumer Prices (HICP) inflation ticked higher to 2.4%, compared to the forecast hold at 2.3%.
16)China’s economic growth showed signs of moderation in April. The manufacturing PMI dipped to 50.4, down from 50.8 in March. The services sector also indicated a slowdown, with the Non-Manufacturing PMI falling to 51.2 from 53.0. This broad-based weakening is reflected in the Composite PMI Output Index, which declined to 51.7 compared to 52.7 in March.
17)China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) came in at 51.4 in April, exceeding the forecast of 51.0 but slightly lower than the previous reading of 51.1. This indicates continued expansion in the manufacturing sector, albeit at a slower pace than in March.
18)Turkey’s credit rating was upgraded by S&P Global Ratings, aided by the government’s return to more orthodox policies. S&P Global has moved Turkey’s long-term sovereign rating one notch higher to B from B, with a positive outlook, according to a statement on Friday.
