Weekly Wrap
27th June - 30th June, 2022

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  • 27 June 2022

    Global commodity prices took a breather and easing fears around inflation adding to the possibility of less aggressive monetary tightening by Fed. Demand for safe- haven as a result weakened with dollar sliding by 0.2%.Global stock indices closed higher Global yields largely ended higher with US 10Y yield up by 4bps. Investors will closely monitor the following events this week; G-7, OPEC+ meet, Q1CY22 print of US GDP and UK retail sales.


    Global indices continued to trade higher in a sign of a possible relief rally from the ongoing sell-off. Additionally, a dip in commodity prices also eased fears of surge in inflation. Amongst other indices, S&P500 (3.1%) gained the most. This was followed by both FTSE and Dow Jones inching up by 2.7% each. Sensex too ended in green rose by 0.9% led by gains in auto and power stocks. It is trading further higher today, in line with other Asian stocks

    Fig 1 – Stock markets

      23-06-2022 24-06-2022 % change
    Dow Jones 30,677 31,501 2.7
    S & P 500 3,796 3,912 3.1
    FTSE 7,020 7,209 2.7
    Nikkei 26,171 26,492 1.2
    Hang Seng 21,274 21,719 2.1
    Shanghai Comp 3,320 3,350 0.9
    Sensex 52,266 52,728 0.9
    Nifty 15,557 15,699 0.9

    Source: Bloomberg, Bank of Baroda Research


    Except JPY (lower) and INR (flat), other global currencies ended higher against the dollar. DXY retreated by 0.2% as dip in commodity prices (copper/zinc/aluminium) have eased inflationary concerns and are raising fears over possibility of global recession. Today, INR is trading higher today, while other Asian currencies are trading mixed.

    Fig 2 – Currencies

      23-06-2022 24-06-2022 % change
    EUR/USD 1.0523 1.0553 0.3
    GBP/USD 1.2260 1.2268 0.1
    USD/JPY 134.95 135.23 (0.2)
    USD/INR 78.31 78.34 0
    USD/CNY 6.6990 6.6898 0.1

    Source: Bloomberg, Bank of Baroda Research


    Barring UK and Japan (lower), other global yields closed higher. US 10Y yield rose the most (4bps), as Fed Chair Powell reaffirmed central bank’s “unconditional” support to tame inflation. Yields in China (2bps) and Germany (1bps) too inched up. India’s 10Y yield rose by 2bps to 7.44%, following pick up in crude oil prices.

    Fig 3 – Bond 10Y yield

      23-06-2022 24-06-2022 change in bps
    US 3.09 3.13 4
    UK 2.32 2.30 (1)
    Germany 1.43 1.44 1
    Japan 0.24 0.23 (1)
    China 2.83 2.85 2
    India 7.42 7.44 2

    Source: Bloomberg, Bank of Baroda Research


    Fig 4 – Short term rates

      23-06-2022 24-06-2022 % change
    Tbill-91 days 5.1 5.1 (1)
    Tbill-192 days 5.7 5.7 (1)
    Tbill-364 days 6.2 6.2 0
    G-Sec 2Y 6.5 6.6 2
    SONIA int rate benchmark 1.2 1.2 0
    US SOFR 1.5 1.4 (1)

    Source: Bloomberg, Bank of Baroda Research


    Fig 5 – Liquidity

    Rs tn 23-06-2022 24-06-2022 change (Rs tn)
    Net Liquidity (-Surplus/+deficit) (2.0) (2.0) 0
    Reverse repo 2.0 2.0 0
    Repo 0 0 0

    Source: RBI, Bank of Baroda Research


    Fig 6 – Capital market flows

      22-06-2022 23-06-2022 change (US$ mn/Rs cr)
    FII (US$ mn) (21.1) (280.0) (258.9)
    Debt 313.0 (23.1) (336.1)
    Equity (334.1) (256.9) 77.2
    Mutual funds (Rs cr) 1,385.1 842.9 (542.3)
    Debt 879.1 374.2 (504.9)
    Equity 506.1 468.7 (37.4)

    Source: Bloomberg, Bank of Baroda Research; Note-mutual fund data pertains to 16 and 17 May 2022


    Crude prices surged by 2.8% to US$ 113/bbl, amidst tightening of supplies and ahead of G-7 meet. Gold prices too inched up by 0.2% as dollar weakened.

    Fig 7 – Commodities

      23-06-2022 24-06-2022 % change
    Brent crude (US$/bbl) 110.1 113.1 2.8
    Gold (US$/ Troy Ounce) 1,822.8 1,826.9 0.2
    Copper (US$/ MT) 8,397.0 8,381.0 (0.2)
    Zinc (US$/MT) 3,709.5 3,485.0 (6.1)
    Aluminium (US$/MT) 2,477.5 2,456.0 (0.9)

    Source: Bloomberg, Bank of Baroda Research

  • 28 June 2022

    investor continue to monitor the ongoing developments in the G-7 meet. Major stock indices gained as fears of inflation subsided with moderation in commodity prices. US 10Y yields continued to climb higher, assessing risks of rate hike. In US, data prints surprised positively with core capital goods order rising by 0.5% in May’22 (0.3% in Apr’22). Pending home sales also rebounded after falling for straight 6-months, signalling early signs of strengthening economy. DXY slipped by 0.2%. Oil prices surged further on reports of tightening supplies


    Apart from US markets, other global indices ended higher as investors monitored easing of Covid-19 restrictions in China and dip in commodity prices. Amongst other indices, Hang Seng (2.4%) gained the most, followed by Nikkei (1.4%). US indices ended lower with major sub-indices ending in red, largest loss suffered by consumer discretionary stocks. On the other hand, Sensex closed the day in green led by gains in capital goods and IT stocks. However, it is trading lower today, in line with other Asian stocks.

    Fig 1 – Stock markets

      24-06-2022 27-06-2022 % change
    Dow Jones 31,501 31,438 (0.2)
    S & P 500 3,912 3,900 (0.3)
    FTSE 7,209 7,258 0.7
    Nikkei 26,492 26,871 1.4
    Hang Seng 21,719 22,230 2.4
    Shanghai Comp 3,350 3,379 0.9
    Sensex 52,728 53,161 0.8
    Nifty 15,699 15,832 0.8

    Source: Bloomberg, Bank of Baroda Research


    Except EUR (higher) and JPY (lower) other global currencies ended flat against the dollar. DXY retreated by 0.2% as investors assess the probability of global recession and await cues from ECB central bank forum this week. Today, INR is trading lower, while other Asian currencies are trading mixed.

    Fig 2 – Currencies

      24-06-2022 27-06-2022 % change
    EUR/USD 1.0553 1.0584 0.3
    GBP/USD 1.2268 1.2265 0
    USD/JPY 135.23 135.46 (0.2)
    USD/INR 78.34 78.35 0
    USD/CNY 6.6898 6.6918 0

    Source: Bloomberg, Bank of Baroda Research


    Barring China and India (lower), other global yields closed higher. Germany (11bps), UK (9bps) and US’ (7bps) 10Y yields rose the most. Investors await cues from speeches of central bankers (US, UK, ECB) at the ECB central bank forum and inflation print for Europe, due this week. India’s 10Y yield fell by 3bps to 7.41%, owing to anticipation of step up in PSU bank bond buying.

    Fig 3 – Bond 10Y yield

      24-06-2022 27-06-2022 change in bps
    US 3.13 3.20 7
    UK 2.30 2.39 9
    Germany 1.44 1.55 11
    Japan 0.23 0.25 2
    China 2.85 2.83 (2)
    India 7.44 7.41 (3)

    Source: Bloomberg, Bank of Baroda Research


    Fig 4 – Short term rates

      24-06-2022 27-06-2022 % change
    Tbill-91 days 5.1 5.1 0
    Tbill-192 days 5.7 5.7 4
    Tbill-364 days 6.2 6.2 (5)
    G-Sec 2Y 6.6 6.6 0
    SONIA int rate benchmark 1.2 1.2 0
    US SOFR 1.4 1.5 2

    Source: Bloomberg, Bank of Baroda Research


    Fig 5 – Liquidity

    Rs tn 24-06-2022 27-06-2022 change (Rs tn)
    Net Liquidity (-Surplus/+deficit) (2.0) (2.2) (0.2)
    Reverse repo 2.0 2.0 0
    Repo 0 0 0

    Source: RBI, Bank of Baroda Research


    Fig 6 – Capital market flows

      23-06-2022 24-06-2022 change (US$ mn/Rs cr)
    FII (US$ mn) (280.0) (304.7) (24.8)
    Debt (23.1) (35.6) (12.4)
    Equity (256.9) (269.2) (12.3)
    Mutual funds (Rs cr) 1,385.1 842.9 (542.3)
    Debt 879.1 374.2 (504.9)
    Equity 506.1 468.7 (37.4)

    Source: Bloomberg, Bank of Baroda Research; Note-mutual fund data pertains to 16 and 17 May 2022


    Crude prices continued to edge upwards to US$ 115/bbl, amidst news reports of further tightening of supplies and prospects of new sanctions being imposed on Russia in the ongoing G-7 meet.

    Fig 7 – Commodities

      24-06-2022 27-06-2022 % change
    Brent crude (US$/bbl) 113.1 115.1 1.7
    Gold (US$/ Troy Ounce) 1,826.9 1,822.9 (0.2)
    Copper (US$/ MT) 8,381.0 8,419.3 0.5
    Zinc (US$/MT) 3,485.0 3,384.0 (2.9)
    Aluminium (US$/MT) 2,456.0 2,495.5 1.6

    Source: Bloomberg, Bank of Baroda Research

  • 29 June 2022

    investor looked for cues as uncertainties clouded global markets. Relaxations of Covid-19 restrictions in China bolstered hope of economic revival. US consumer confidence dropped to its lowest level since Feb’21 (98.7 in Jun’22 from 103.2 in May’22) With this, fears of recession in the US economy heightened. ECB in its annual forum reaffirmed it commitment to raise rates in order to combat inflation. Global crude oil prices continued to climb higher on the back of supply constraints. INR depreciated to a fresh record low of 78.77/$ amidst higher oil prices.


    Barring US indices, other global indices ended higher. Shanghai comp, FTSE and Hang Seng climbed up by 0.9% each after China eased the Covid-19 restrictions. US indices ended lower led by weaker data print (US consumer confidence dropped in Jun’22) bringing back fears of possible recession. Sensex ended flat. However, it is trading lower today, in line with other Asian stocks.

    Fig 1 – Stock markets

      27-06-2022 28-06-2022 % change
    Dow Jones 31,438 30,947 (1.6)
    S & P 500 3,900 3,822 (2.0)
    FTSE 7,258 7,323 0.9
    Nikkei 26,871 27,049 0.7
    Hang Seng 22,230 22,419 0.9
    Shanghai Comp 3,379 3,409 0.9
    Sensex 53,161 53,177 0
    Nifty 15,832 15,850 0.1

    Source: Bloomberg, Bank of Baroda Research


    Global currencies closed lower against the dollar. DXY rose by 0.5% owing to increase in safe-haven demand. Weaker than anticipated US consumer confidence print and increased probability of growth suffering a larger hit in Europe impacted investor sentiments. INR fell by 0.5% following global cues. It is trading further lower today, in line with other Asian currencies.

    Fig 2 – Currencies

      27-06-2022 28-06-2022 % change
    EUR/USD 1.0584 1.0519 (0.6)
    GBP/USD 1.2265 1.2184 (0.7)
    USD/JPY 135.46 136.14 (0.5)
    USD/INR 78.35 78.77 (0.5)
    USD/CNY 6.6918 6.7080 (0.2)

    Source: Bloomberg, Bank of Baroda Research


    Barring US (lower) and Japan (flat), other global yields closed higher. Germany (8bps) and UK’s (7bps) 10Y yields rose the most. ECB president Lagarde reaffirmed central bank’s commitment to take significant action if there is deterioration in inflation outlook. US 10Y yield fell by 3bps as investors become increasingly warry of possibility of an economic recession, as consumer confidence index in US slipped in Jun’22 and home prices saw deceleration in Apr’22. India’s 10Y yield rose by 6bps to 7.47%, owing to pick up in oil prices.

    Fig 3 – Bond 10Y yield

      27-06-2022 28-06-2022 change in bps
    US 3.20 3.17 (3)
    UK 2.39 2.47 7
    Germany 1.55 1.63 8
    Japan 0.25 0.24 0
    China 2.83 2.85 2
    India 7.41 7.47 6

    Source: Bloomberg, Bank of Baroda Research


    Fig 4 – Short term rates

      27-06-2022 28-06-2022 % change
    Tbill-91 days 5.1 5.1 6
    Tbill-192 days 5.7 5.8 5
    Tbill-364 days 6.2 6.2 4
    G-Sec 2Y 6.6 6.5 (1)
    SONIA int rate benchmark 1.2 1.2 0
    US SOFR 1.5 1.5 4

    Source: Bloomberg, Bank of Baroda Research


    Fig 5 – Liquidity

    Rs tn 27-06-2022 28-06-2022 change (Rs tn)
    Net Liquidity (-Surplus/+deficit) (2.2) (2.3) (0.1)
    Reverse repo 2.0 2.0 0
    Repo 0 0 0

    Source: RBI, Bank of Baroda Research


    Fig 6 – Capital market flows

        24-06-2022     27-06-2022   change (US$ mn/Rs
      FII (US$ mn)   (304.7)   (259.8) cr) 44.9
    Debt (35.6) (120.4) (84.8)
    Equity (269.2) (139.5) 129.7
    Mutual funds (Rs cr) 1,385.1 842.9 (542.3)
    Debt 879.1 374.2 (504.9)
    Equity 506.1 468.7 (37.4)

    Source: Bloomberg, Bank of Baroda Research; Note-mutual fund data pertains to 16 and 17 May 2022


    Crude prices climbed further higher as major producers such as UAE and Saudi Arabia flagged their capacity limits adding to concerns of tightening of supplies. Gold slipped lower led by higher by DXY.

    Fig 7 – Commodities

      27-06-2022 28-06-2022 % change
    Brent crude (US$/bbl) 115.1 118.0 2.5
    Gold (US$/ Troy Ounce) 1,822.9 1,820.0 (0.2)
    Copper (US$/ MT) 8,419.3 8,360.0 (0.7)
    Zinc (US$/MT) 3,384.0 3,390.0 0.2
    Aluminium (US$/MT) 2,495.5 2,491.0 (0.2)

    Source: Bloomberg, Bank of Baroda Research

  • 30 June 2022

    Global investors monitored the looming threat of recession as inflation continues to remain a challenge for central banks. Fed reiterated its commitment towards managing inflation even if it ‘involves some pain’ as it remains a much bigger risk. On the other hand, China’s manufacturing (50.2 in Jn’22 from 49.6 in May’22) and services PMI (54.7 in Jun’22 from 47.8 in May’22) improved amidst easing of lockdown restrictions. However developments around property market, reoccurrence of infections and softer consumer spending remain key concerns. Crude prices declined after 3-day gain, even as concerns rose from further supply constraints due to unrest in Ecuador and Libya.


    Barring Dow Jones, other global indices ended lower led by fears of impeding global economic downturn. Hang Seng (1.9%) dropped the most followed by Shanghai Comp (1.4%). Final print of US Q1GDP was revised downward to (-) 1.6% from (-) 1.5% earlier, however domestic demand remained strong. Sensex ended lower (0.3%) led by losses in banking and technology stocks. However, it is trading higher today, in line with other Asian stocks.

    Fig 1 – Stock markets

      28-06-2022 29-06-2022 % change
    Dow Jones 30,947 31,029 0.3
    S & P 500 3,822 3,819 (0.1)
    FTSE 7,323 7,312 (0.2)
    Nikkei 27,049 26,805 (0.9)
    Hang Seng 22,419 21,997 (1.9)
    Shanghai Comp 3,409 3,362 (1.4)
    Sensex 53,177 53,027 (0.3)
    Nifty 15,850 15,799 (0.3)

    Source: Bloomberg, Bank of Baroda Research


    Except CNY (higher), other global currencies closed lower. DXY rose by 0.6% to hover around a 20-year high as Fed Chair reiterated the central bank’s hawkish stance. EUR depreciated the most by 0.7% amidst ECB President’s comments on persistent inflation. INR depreciated further to a new record-low of 78.97/$ led by continued FPI outflows and a stronger USD. However it is trading marginally higher today, while other Asian currencies are trading lower.

    Fig 2 – Currencies

      28-06-2022 29-06-2022 % change
    EUR/USD 1.0519 1.0442 (0.7)
    GBP/USD 1.2184 1.2124 (0.5)
    USD/JPY 136.14 136.59 (0.3)
    USD/INR 78.77 78.97 (0.2)
    USD/CNY 6.7080 6.7009 0.1

    Source: Bloomberg, Bank of Baroda Research


    Global yields closed lower amidst increasing risks of a global recession. US 10Y yield dropped by 8bps as US GDP for Q1CY22 showed that the economy contracted more than initially estimated. 10Y yield in Germany also fell by 11bps as CPI softened in Jun’22. India’s 10Y yield fell by 1bps to 7.46% as oil prices eased. It is trading further lower at 7.43%.

    Fig 3 – Bond 10Y yield

      28-06-2022 29-06-2022 change in bps
    US 3.17 3.09 (8)
    UK 2.47 2.39 (8)
    Germany 1.63 1.52 (11)
    Japan 0.24 0.24 (1)
    China 2.85 2.83 (1)
    India 7.47 7.46 (1)

    Source: Bloomberg, Bank of Baroda Research


    Fig 4 – Short term rates

      27-06-2022 28-06-2022 % change
    Tbill-91 days 5.12 5.14 2
    Tbill-192 days 5.75 5.77 2
    Tbill-364 days 6.23 6.28 5
    G-Sec 2Y 6.55 6.58 4
    SONIA int rate benchmark 1.19 1.19 0
    US SOFR 1.50 1.52 2

    Source: Bloomberg, Bank of Baroda Research


    Fig 5 – Liquidity

    Rs tn 28-06-2022 29-06-2022 change (Rs tn)
    Net Liquidity (-Surplus/+deficit) (2.3) (2.5) (0.2)
    Reverse repo 2.0 2.0 0
    Repo 0 0 0

    Source: RBI, Bank of Baroda Research


    Fig 6 – Capital market flows

      27-06-2022 28-06-2022 change (US$ mn/Rs cr)
    FII (US$ mn) (259.8) (242.9) 16.9
    Debt (120.4) (134.6) (14.2)
    Equity (139.5) (108.4) 31.1
    Mutual funds (Rs cr) 1,385.1 842.9 (542.3)
    Debt 879.1 374.2 (504.9)
    Equity 506.1 468.7 (37.4)

    Source: Bloomberg, Bank of Baroda Research; Note-mutual fund data pertains to 16 and 17 May 2022


    Crude prices fell by 1.5% to US$ 116.3/bbl led by demand concerns amidst worsening global outlook. Gold prices fell by 0.1% as dollar continued to climb.

    Fig 7 – Commodities

      28-06-2022 29-06-2022 % change
    Brent crude (US$/bbl) 118.0 116.3 (1.5)
    Gold (US$/ Troy Ounce) 1,820.0 1,817.7 (0.1)
    Copper (US$/ MT) 8,360.0 8,399.3 0.5
    Zinc (US$/MT) 3,390.0 3,392.3 0.1
    Aluminium (US$/MT) 2,491.0 2,471.0 (0.8)

    Source: Bloomberg, Bank of Baroda Research

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Important disclosures are provided at the end of this report.

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The views expressed in this research note are personal views of the author(s) and do not necessarily reflect the views of Bank of Baroda. Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/ purchase or as an invitation or solicitation to do so for any securities of any entity. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. Bank of Baroda Group or its officers, employees, personnel, directors may be associated in a commercial or personal capacity or may have a commercial interest including as proprietary traders in or with the securities and/ or companies or issues or matters as contained in this publication and such commercial capacity or interest whether or not differing with or conflicting with this publication, shall not make or render Bank of Baroda Group liable in any manner whatsoever & Bank of Baroda Group or any of its officers, employees, personnel, directors shall not be liable for any loss, damage, liability whatsoever for any direct or indirect loss arising from the use or access of any information that may be displayed in this publication from time to time

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