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On Tuesday, U.S. stock indexes closed mostly lower as investors cautiously looked ahead to March inflation data due Wednesday that could help determine the Federal Reserve’s next interest-rate move. The March CPI reading from the Bureau of Labor Statistics, US, is expected to show a 5.1% rise from a year earlier, slowing from a 6% year-over-year rise in the previous month, according to a survey of economists by Dow Jones.
Corporate earnings reporting season is also set to kick off in earnest on Friday, further adding to the cautious tone among investors.
The IMF and its Impact on U.S. Banks
Meanwhile, the International Monetary Fund (IMF) has expressed concern over recent stress in the banking sector, which could reduce the ability of U.S. banks to lend over the next year, and materially lower U.S. economic growth. The IMF estimated that lending capacity in the U.S. could fall by almost 1% in the coming year, reducing U.S. real gross domestic product by 44 basis points over that time frame.
This news adds to the sense of unease among investors as they await the March inflation data, which could provide valuable insight into the state of the U.S. economy.
What Futures Show for Interest Rates
Futures show a 71.8% likelihood that the Fed will raise rates by 25 basis points to a range of 5.0%-5.25% when policymakers conclude a two-day meeting on May 3, according to CME Group’s FedWatch tool. This would be the first time the Fed has raised rates in nearly two years.
The IMF Trims Global Growth Forecasts
The International Monetary Fund has trimmed its global growth forecasts, citing the recent banking sector turmoil and Russia’s invasion of Ukraine. The IMF has also cut its GDP growth forecast for India for the financial year 2023-24 by 20 basis points to 5.9 percent and by 50 bps to 6.3% for the next year.
India’s Retail Inflation and Industrial Output
India’s headline retail inflation is expected to have dropped to a 15-month low in March thanks to a favourable base. According to a Moneycontrol survey of 17 economists, Consumer Price Index (CPI) inflation likely fell sharply to 5.7 percent last month from 6.44 percent in February. India’s industrial output is expected to grow by 5.8 percent, the highest in three months. In January, industrial production had risen by 5.2 percent.
TCS Q4 Numbers
TCS will announce its Q4 numbers on April 12. Investors will be watching closely to see how the company has performed, particularly in light of the challenging economic environment.
Asian Stocks Advance Ahead of U.S. Inflation Data
Asian stocks advanced on Tuesday ahead of US inflation data that may signal whether the Federal Reserve will keep raising interest rates.
Nifty’s Seventh Consecutive Session
Nifty rose for the seventh consecutive session on April 11 helped by positive global cues. At close, Nifty was up 0.56% or 98.3 points at 17722.3. Nifty overcame the hesitation seen on the previous day and marched ahead. It could now stay in the 17639-17800 band in the near term waiting for economic data like India CPI and IIP and US CPI (due April 12) for further triggers.