GLOBAL NEWS:-
The International Monetary Fund will resume discussions with Sri Lanka in February for further disbursal of part of a $1.5 billion loan, the lender said, after a political crisis led to talks being delayed by three months.Sri Lanka government leaders had agreed to stick to a reform programme following a meeting with IMF managing director Christine Lagarde in Washington on Tuesday, the bank said in a statement.Sri Lanka is struggling to restore investor confidence and pay down its debt after it was plunged into political turmoil in October when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved parliament.
China’s central bank on Wednesday made its biggest daily net cash injection via reverse repo operations on record, more evidence that authorities are shifting to policy easing to counter a slowdown in the world’s second largest economy.The People’s Bank of China said the injection was to maintain “reasonably ample” liquidity in the banking system.In open market operations, the People’s Bank of China (PBOC) injected 350 billion yuan ($51.64 billion) through seven-day reverse bond repurchase agreements and 220 billion yuan through 28-day reverse repos.On a net basis, the PBOC injected a net 560 billion yuan for the day, as 10 billion yuan reverse repos are set to mature on Wednesday.
China’s trade faces rising uncertainties this year,Ren Hongbin, an assistant minister at the commerce ministry, made the comment at a news conference.
Japan’s core machinery orders slowed sharply in November in a sign corporate capital expenditure could lose momentum as a bruising U.S.-China trade war spills into the global economy.The slight 0.02 percent decline month-on-month in core machinery orders, considered a leading indicator of capital expenditure, was well below the median estimate for a 3.5 percent increase and marked a slowdown from a 7.6 percent expansion in October.A trade war between the United States and China is weighing on growth in the world’s two largest economies, which threatens Japan’s growth because its exporters could delay investment and hiring due to worries about corporate profits.
The U.S. economy is taking a larger-than-expected hit from the partial government shutdown, White House estimates showed on Tuesday, as contractors and even the Coast Guard go without pay and talks to end the impasse seemed stalled.The longest U.S. government shutdown in history reached its 25th day on Tuesday, with most of the 800,000 employees who have been furloughed or are working without pay having missed their first paychecks last week.The White House and congressional Democrats remain divided over Republican President Donald Trump’s demand for money for a border wall.
British lawmakers defeated Prime Minister Theresa May’s Brexit divorce deal by a crushing margin on Tuesday, triggering political chaos that could lead to a disorderly exit from the EU or even to a reversal of the 2016 decision to leave.After parliament voted 432-202 against her deal, the worst defeat in modern British history, opposition Labour Party leader Jeremy Corbyn promptly called a vote of no confidence in May’s government, to be held on Wednesday.With the clock ticking down to March 29, the date set in law for Brexit, the United Kingdom is now ensnared in the deepest political crisis in half a century as it grapples with how, or even whether, to exit the European project that it joined in 1973.“It is clear that the House does not support this deal, but tonight’s vote tells us nothing about what it does support,” May told parliament.
Indian rupee today traded marginally higher against US dollar after the country’s trade deficit narrowed to a 10-month low in December. At 9.15am, the currency was trading at 70.95 a dollar, up 0.10% from previous close of 71.02. The home currency opened at 71.03 a dollar.
The government 10-year bond yield was at 7.25%, as compared to its Tuesday’s close of 7.252%. Bond yields and prices move in opposite directions.Trade deficit narrowed to $13.08 billion in December, the lowest in 10 months, due to a fall in gold imports, the trade ministry said in a statement on Tuesday. In November, the trade deficit was $16.67 billion.The benchmark Sensex index rose 0.35% to 36444.38 points. Year to date, it is rose 0.7%.So far this year, the rupee has declined 1%, while foreign investors have sold $449.10 million and $75 million in the equity and debt markets respectively
Asian shares took a breather on Wednesday after rallying the previous day on Chinese stimulus hopes, with investors assessing Brexit options after British lawmakers trounced Prime Minister Theresa May’s deal to pull out Britain from the European Union.MSCI’s broadest index of Asia-Pacific shares outside Japan was off a touch, having swung up on Tuesday after Chinese officials came out in force to signal more measures to stabilise a slowing economy.
The China hopes also helped boost Wall Street overnight, though the early session in Asia saw investors tread cautiously.Australian shares tacked on 0.1 percent while Japan’s Nikkei lost 0.7 percent.May’s crushing loss marks the collapse of her two-year strategy of forging an amicable divorce with close ties to the EU after the March 29 exit.Investors’ focus is now on a confidence vote on May’s government by lawmakers later on Wednesday.
European Union leaders expressed dismay and regret on Tuesday after the British parliament rejected a Brexit divorce deal, saying they were stepping up emergency planning and warned London was running out of time.The EU’s chief executive, the European Parliament Brexit negotiator and a host of prime ministers took to Twitter to call on London for ideas on what to do now to stop Britain crashing out of the bloc with no deal on March 29.
Gold held steady on Wednesday, supported by uncertainty around Brexit, after lawmakers voted down British Prime Minister Theresa May’s deal to leave the European Union, and hopes for a rate hike pause by the U.S. Federal Reserve.Spot gold was steady at $1,289.31 per ounce. U.S. gold futures were also firm at $1,288.80 per ounce.Gold tends to gain on expectations of lower interest rates, as they reduce the opportunity cost of holding non-yielding bullion. Lower interest rates also tend to weigh on U.S. yields and the dollar, in which gold is priced.
Oil prices dipped on Wednesday on increasing signs of a global economic slowdown, although OPEC-led supply cuts helped support Brent crude above $60 per barrel.International Brent crude oil futures were at $60.46 per barrel at 0146 GMT, down 18 cents, or 0.3 percent from their last close.U.S. West Texas Intermediate (WTI) crude futures were down 23 cents, or 0.4 percent, at $51.88 a barrel..Prices were weighed down as signs of a global economic slowdown mounted.Oil prices are receiving support from supply cuts started late last year by the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) and major non-OPEC producer Russia.
However, surging U.S. crude oil production, which hit a record 11.7 million barrels per day late last year, threatens to undermine the OPEC-led efforts.U.S. crude oil is expected to rise to a new record of more than 12 million barrels per day (bpd) this year and to climb to nearly 13 million bpd next year, the U.S. Energy Information Administration said on Tuesday in its first 2020 forecast.With so much uncertainty around demand and supply, the outlook for oil markets is unclear.