INDIA: Household Inflation Expectations Moderate Marginally in Jan 2025
The RBI has released the results of its forward looking surveys. Highlights below:
- Households' median inflation perception moderated marginally by 10 basis points (bps) from the previous survey round to 8.3 per cent.
- Inflation expectations for the three months and one-year horizons increased by 20 bps and 10 bps to 9.3 per cent and 10.2 per cent, respectively.
- Consumer confidence for the current period marginally declined owing to somewhat tempered sentiments across the survey parameters except price level; the current situation index (CSI) moderated by 0.3 point to 93.7 in January 2025.
- Manufacturing companies reported marginally better demand conditions in Q3:2024-25 vis-à-vis the previous quarter, as reflected in their assessment for production, employment, capacity utilisation, exports and order books.
- Bankers expect some moderation on overall loan demand conditions during Q4:2024-25; the high optimism on demand for retail/personal loans tempered even as it improved or remained at previous quarter’s level for other sectors.
See the full releases here.
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US: Review Of President-Elect Donald Trump's Mar-a-Lago Press Conference
US President-elect Donald Trump delivered a wide-ranging press conference at his Mar-a-Lago resort in Florida on January 7, touching on various issues from energy to his foreign policy ambition of carving out a new US sphere of influence from Panama to Greenland.
- Please find below a full summary of the presser with analysis of the key comments related to foreign policy, tariffs, energy, and legislation.
Full article: Trump Press Conference Review
GILTS: Long Futures Positioning A Potential Factor In Sell Off
Elsewhere, a reminder that our latest positioning indicator update (published yesterday) pointed to long positioning in gilt futures. That could be adding further fuel to the sell off.
GILTS: Further Selling
Further weakness in gilts accompanies pressure for GBP in FX trade, with the market in price discovery mode after finding fresh multi-decade highs in 30-Year yields and registering the highest level seen since ’23 in 10-year yields.
- Yields now 2.5-5.0bp higher across the curve, while futures trade as low as 90.75.
- Technicals for 10s & futures outlined in the prior post.
- No fresh UK headline triggers, but continued erosion of already limited fiscal headroom adds to wider pressure stemming from a reassessment of global term premium, hawkish U.S. data and a heavy start to ’25 IG supply, as well as medium-term structural headwinds for gilts.
- SONIA futures +0.5 to -9.0. Dec low in SFIZ5 untested. Nov low in SFIZ6 broken.
