PB Macro

We analyze macro economic data and emerging trends. Providing financial literacy for global community.

[PB Macro @MacroPb]

#Indian #Forex reserves have been dropping recently. Main reasons include withdrawal of funds by #FPIs and high crude oil prices. Although reserves have fallen, they are still high based on historical figures. Here are reserves data since 1999.

[PB Macro @MacroPb]

In the coming weeks and months, it remains to be seen if QE continues. If it does, it will have negative impact on British Pound. Britain seems to be the first country which fell victim to Monetary tightening. Will this effect spill over remains to be seen. 4/4

[PB Macro @MacroPb]

UK long dated bonds experienced sell off in market. This prompted Bank of England to intervene and buy the bonds and prevent further slide. BoE will daily buy 5 billion pounds worth of bonds until at least Oct 14. There was increase in bond yield by a full percentage point. 1/4

[PB Macro @MacroPb]

The selloff was due to following macro events:
1) Rising fiscal deficit of UK govt: This is due to proposed reduction in taxes and energy subsidy
2) Higher energy prices are making industry uncompetitive and lowering disposable income 3/4

[PB Macro @MacroPb]

With rising interest rates, interest cost for governments across the globe is increasing. Thus, a larger portion of the national budget will now go towards interest payments. The increased cost will either be paid by cutting spending, higher taxes or taking more debt.

[PB Macro @MacroPb]

Higher interest rate has started to show its impact on consumers. Retail sales in Canada declined MoM by 2.5% in July.
https://t.co/LUrr6h6oHW

[PB Macro @MacroPb]

India's #forex reserves declined WoW by $5.22 billion to $545.65 billion. The decline was primarily due to #dollar strengthening leading to sale of forex by #RBI to protect #Rupee.

[PB Macro @MacroPb]

With rising interest rates, interest cost for governments across the globe is increasing. A bigger chunk of budget will now go towards interest payments. The options that governments have are:

a. Cut spending,
b. Higher taxes or
c. Take on more debt https://t.co/PpQaaCvPIp

[PB Macro @MacroPb]

It will be big in terms of global geopolitics, if it goes through.
https://t.co/9u2srH7lfb

[PB Macro @MacroPb]

#Germany seizes Russian assets

#RussiaUkraineWar
https://t.co/xML4npqboE

[PB Macro @MacroPb]

Latest #RBI data shows that India's #Forex Reserves have fallen week over week to $550 billion. Reserves increased sharply after 2018 but have been on the decline since beginning of the year due to high crude oil prices and US #FED tightening.

[PB Macro @MacroPb]

Indian refineries consume around 5.2 million bbls/d of crude. The month of June and July saw a dip in crude processing after processing record volumes in May 2022. #CrudeOil #EFT #COM #India

[PB Macro @MacroPb]

2/2 Perhaps this simple video can help explain the situation

[PB Macro @MacroPb]

1/2 Apples are selling in the retail market at nearly 10 times of what was paid to the farmers. This is similar to what happens with other agricultural produce that is sold in free market. The middle man profits while the consumer and farmers suffer.

[PB Macro @MacroPb]

With cost of energy becoming unbearable for average person in Europe, UK becomes the first country to cap energy bills.

https://t.co/rgK6wVISwV

[PB Macro @MacroPb]

With rising interest rates squeezing money out of the pockets, Canadians are unable to cover day to day expense and are borrowing to fill the gap.
https://t.co/zxPANQD8v5

[PB Macro @MacroPb]

BoC has hiked its policy rate by another 75 basis point to 3.25%. This is highest in over a decade.

[PB Macro @MacroPb]

UK has new prime minister, Liz Truss. Its fourth in six years.
https://t.co/Wb9ZEmmDDQ

[PB Macro @MacroPb]

Latest quarter #GDP growth rate for #India was 13.4% YoY. However, compared to pre COVID levels (Q1 FY 20), GDP has grown by 1.26% CAGR. The economy hasn't fully recovered from slowdown related to COVID.