Rupee plunges to 72 levels, ECB eyes stimulus package & US factory sector contracts in August

17th Aug – 23rd Aug

1. ECB eyes stimulus package as growth looks weaker: ECB Minutes

Aug 22, 2019

European Central Bank policymakers have said that a combination of measures may be needed to prop up the Euro zone economy, as recent indicators paint an even bleaker picture of the outlook. Markets now expect at least a rate cut of at least 10 basis points and the launch of asset purchases in September.

Source: Reuters

2. Indian FM may announce measures to support economy

Aug 23, 2019

Finance Minister Nirmala Sitharaman will hold a press briefing on Friday evening, a government spokesman said , amidst expectations that the government would announce steps to revive economic growth. The Indian government is believed to be planning to take measures to combat the slowdown.

Source: Live Mint

3. Initial claims for state unemployment benefits dropped

Aug 22, 2019

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 209,000 for the week ended August 17, the Labor Department has said in a separate report. The decline was sharper than expected.

Source: Reuters

4. US factory sector contracts in August

Aug 22, 2019

IHS Markit on Thursday has said that it’s Flash Purchasing Managers’ Index (PMI) for manufacturing fell to 49.9 earlier this month from 50.4 in July, pointing to a contraction in the sector for the first time since September 2009.

Source: Reuters

5. Crude stockpiles decreased 2.7 million barrels but fuel inventory rose

Aug 20, 2019

Crude stockpiles decreased 2.7 million barrels, a bigger drawdown than the 1.9 million barrels of market forecast, but gasoline stocks rose by 312,000 barrels, while distillate supplies grew by 2.6 million barrels.

Source: CNBC

6. Tensions in the Middle East remained in focus, Iran President warns of supply threat

Aug 21, 2019

Tensions in the Middle East remained in focus and crude oil prices may find some support from a possible supply threat from Iran. If Iran's oil exports are cut to zero, international waterways will not have the same security as before, said Hassan Rouhani, President of Iran.

Source: Moneycontrol

7. The Indian rupee plunged to 72 against the US dollar, and is set for the biggest monthly fall in six years

Aug 23, 2019

The Indian rupee plunged to 72 against the US dollar and is set for the biggest monthly fall in six years over tumbling equities; incessant foreign fund outflows have also weighed on the sentiments. The sudden drop in Chinese Yuan also increased volatility in emerging market currencies.

Source: Economic Times

8. The RBI may cut interest rates more rapidly in the coming months

Aug 21, 2019

The RBI may cut interest rates more rapidly in the coming months to create demand in the economy. Significant moderation in retail inflation was resulting in softening of demand in the economy.  Economic activity has shown signs of further weakness since the last policy review in June 2019 and credit growth has slowed down in recent times. We believe that the RBI may remain dovish over the longer term.

Source: Economic Times