Finance Minister announces big tax boost for the Indian economy, Fed cuts rates by 25 bps & Aramco to restore lost oil production

14th Sept – 20th Sept

1. Finance Minister announces big tax boost for the Indian economy by lowering the corporate tax

Sept 20, 2019

The government has slashed the basic corporate tax rate to 22% from 30% while for new manufacturing companies it has been cut down to 15% from 25%. A domestic company can pay income tax at 22% if they don't seek any exemption or incentives. The effective tax rate is now 25.17%, inclusive of all surcharges and cess, for such domestic companies. For new manufacturing companies that start production before March 2023 and are incorporated on or after 1st October 2019, the corporate tax rate has been brought down to 15% from 25%.

Source: Economic Times

2. The global nickel market deficit widened to 6,700 tonnes in July

Sept 20, 2019

The global nickel market deficit widened to 6,700 tonnes in July from a revised shortfall of 2,700 tonnes in the previous month, the International Nickel Study Group (INSG) said on Thursday.

Source: Reuters

3. The Federal Reserve cut interest rates by 25 bps as per market expectations

Sept 18, 2019

The Federal Reserve cut interest rates by 25 bps as per market expectations, but the future path looks uncertain. The Federal Reserve kept the Fed funds rate at 1.75% to 2% through the end of the year. The Federal Reserve left the door open for additional cuts, but members were split over the September decision and the outlook for further reductions looks uncertain. It was the second rate cut this year.

Source: Business Standard

4. US China trade talks resume

Sept 19, 2019

Talks between a Chinese delegation led by Liao Min, Vice Minister for Finance, and Deputy U.S. Trade Representative Jeffrey Gerrish began on Thursday and are scheduled to continue on Friday.  President Trump already announced a two-week delay on increasing existing tariffs on $250 billion of Chinese goods to 30% from 25%, which is now set for Oct. 15.

Source: Bloomberg

5. US crude oil inventory increased by 1.1 million barrels

Sept 18, 2019

The Energy Information Administration reported a crude oil inventory build of 1.1 million barrels. This compares with a 6.9-million-barrels draw a week earlier. Gasoline stockpiles increased by 800,000 barrels and distillate fuel inventories rose by 400,000 barrels.

Source: Market watch

6. The Bank of Japan (BoJ) kept the monetary policy steady

Sept 19, 2019

The Bank of Japan (BoJ) kept the monetary policy steady on Thursday. In an expected move, the BoJ maintained its short-term interest rate target at -0.1% and a pledge to guide the 10-year government bond yields around 0%. The BOJ said in statement that it will re-examine economic and price developments at the next Monetary Policy Meeting when it updates the outlook for economic activity and prices.

Source: Economic Times

7. Aramco will restore lost oil production by the end of the month

Sept 17, 2019

Oil prices slipped after Saudi Arabia's Energy Minister sounded confident that Aramco will restore lost oil production by the end of the month. Saudi Aramco has informed some Asian refiners that it will supply full allocated volumes of crude oil in October with some changes.

Source: Reuters

8. India looks to Russia for crude after drone strike on Saudi oil facilities

Sept 17, 2019

India is looking to diversified crude oil sources such as Russia amidst concerns over continued supply from Saudi Arabia, following a drone attack on the country’s oil facilities last week. In the previous financial year, India’s crude oil imports from Russia  were a mere 2 mt. Experts indicate that it may not be possible for the country to take Saudi’s position immediately, but the government may be mulling long-term deals.

Source: Business Standard