RBI cuts repo rate by 25 bps, President Trump aims at a trade deal in 4 weeks & global gold demand seen higher in 2019

30th Mar – 05th Apr

1. RBI cut its benchmark repo rate by 25 bps and maintained its policy stance at neutral

April 04, 2019

RBI cut its benchmark repo rate by 25 bps to 6% but maintained its policy stance at neutral citing upside risks to the economy. This is the second consecutive rate cut from RBI under the new chief Mr. Shaktikanta Das after a surprise rate cut in February. Indian banks had only reduced their lending rates by a token 5-10 basis points post the last meeting and banks may also pass this rate cut marginally.

Source: Livemint

2. The RBI targets inflation at 4% in the medium term, cuts forecast for consumer price growth

April 04, 2019

The RBI, which targets inflation at 4% in the medium term, cut forecast for consumer price growth. The RBI also revised the inflation outlook downwards to 2.9-3% in the first half of this year and 3.5-3.8% for the second half. The lower inflation forecast for the first half of the fiscal year "is a bit optimistic" given that the period of easing price pressures is behind.

Source: Times of India

3. The RBI downgraded GDP growth forecast for the F.Y. 2019-20 to 7.2% from 7.4%

April 04, 2019

The RBI downgraded the GDP growth forecast for the F.Y. 2019-20 to 7.2% from 7.4% seen in February. As per RBI projections, for the first half of FY20, GDP growth is seen at 6.8-7.1 percent, down from the previous projection of 7.2-7.4 percent. While for H2 of FY20, the GDP growth forecast has been cut to 7.3-7.4 percent from 7.5 percent earlier.

Source: Money control

4. U.S. crude inventories rose 7.2 million barrels last week

April 03, 2019

U.S. crude oil inventories rose unexpectedly last week. According to EIA weekly reports, crude oil inventories grew by 7.24 million barrels in the week to March 29. The EIA report also showed that gasoline inventories fell by 1.78 million barrels, while distillate stockpiles dropped by 2.0 million barrels.

Source: Reuters

5. President Trump expecting to reach a trade deal in four weeks

April 05, 2019

U.S. President Trump stated that a trade deal with China was getting very close and could be reached in about four weeks. Similarly, President Trump has also issued a warning to China that in the absence of a deal, it would be difficult to allow trade to continue. President Trump has also said that he would hold a summit with Chinese President Xi Jinping if there was a deal.

Source: Money control

6. Global gold demand to be 4,370 tonnes in the year 2019, slightly higher from 2018

April 01, 2019

According to a private survey report of Metals Focus, the world will consume 4,370 tonnes of gold this year, the most since 2015 and up slightly from 4,364 tonnes in 2018. Gold consumption for jewelry will rise 3 percent this year to 2,351 tonnes, driven by an increase of 7 percent in India and 3 percent in China. Gold supply would rise by 1 percent to 4,707 tonnes because of higher mine production, recycling and producer hedging.


7. First physical delivery trade settles into MCX Aluminium contract

April 02, 2019

Multi Commodity Exchange executed the delivery of 10 tonnes (2 lots) of aluminium under the first compulsory delivery futures this week. The LME-approved 99.97 percent purity ingot was delivered at the MCX approved warehouse at Bhiwandi, Thane district.

Source: Business Line

8. LME Copper warehouse stock reached to six months high

April 05, 2019

Copper inventories in LME-approved warehouses surged this week while inventories at SHFE remained near a nine-month high. Copper inventories in LME-registered warehouses surged by 30,375 tonnes to 198,325 tonnes on Thursday, which is the highest in six months and nearly doubles from the level three weeks ago.

Source: Reuters