The Weekly Economic Commentary released on July 29, 2024 provided analysis and forecasts for the economy and financial markets. Here are the most important insights:
What Were the Key Takeaways from the June Merchandise Trade Data?
The only notable official data release last week was the merchandise trade report for June. While typically ignored by markets, it offers some clues into activity in key sectors of the New Zealand economy. The details were not provided, but the data likely showed the ongoing impacts of global trade tensions.
How Did the Nifty Index Perform Last Week?
The Nifty index in India witnessed a correction on the Budget day, registering a low around 24,070. However, it recovered and rallied sharply on the last day of the week to hit a new all-time high above 24,800. Strong buying interest was seen, especially in the broader markets.
What Are Traders Expecting from Upcoming Central Bank Decisions?
The week ahead is packed with major central bank rate decisions from the Federal Reserve, Bank of Japan, and Bank of England. While no change is expected from the Fed, the BOJ and BOE decisions are considered “live” events where policy changes could move markets. Traders will be watching closely for any shifts in forward guidance.
Which Economic Data Releases Are on Tap This Week?
In addition to the central bank meetings, the economic calendar is full of potentially market-moving data:
| Date | Region | Report |
|---|---|---|
| Tue | EU | German & Spanish CPI |
| Tue | US | Consumer Confidence |
| Wed | Australia | CPI & Retail Sales |
| Wed | EU | Eurozone CPI Flash |
| Wed | US | ADP Employment & Pending Home Sales |
| Thu | UK | Bank of England Decision |
| Thu | US | Jobless Claims & ISM Manufacturing |
| Fri | US | Non-Farm Payrolls & Unemployment |
The US jobs data on Friday will be the highlight as always. Expect volatility around the releases.
What Is the Outlook for the Nifty and Bank Nifty Indexes?
Technical analysis suggests the uptrend has resumed for the Nifty and Bank Nifty indexes in India. The next resistance levels to watch are around the retracement levels from the recent correction. Momentum is strong but some consolidation would be healthy after the sharp rally.
Where Are Indian Equities Headed After the Budget?
With the debate over budget proposals settling down, investors need to position across asset classes based on the new tax rules. For equities, a nuanced, sector-specific approach is prudent rather than broad-based bullishness or bearishness. Favor sectors with positive fundamentals and budget tailwinds.
What Do the Fund Flows Indicate About Market Sentiment?
On July 26, foreign institutional investors (FII/FPI) were net buyers of ₹2,546 crore while domestic institutional investors (DII) bought ₹2,774 crore in the Indian cash markets. The strong inflows, especially from DIIs, underscore the positive sentiment and liquidity support for the market rally.
Is the Nifty Bank Index Ready to Turn Positive?
For the rally to sustain, the Nifty Bank index needs to convincingly breach its overhead resistance levels. The sharp recovery from last week’s lows has reduced the danger of a deeper correction, but follow-through buying is essential to reconfirm the uptrend. Bank earnings will be in focus.
In summary, the Weekly Economic Commentary painted a cautiously optimistic picture, with markets looking past near-term risks and latching on to signs of resilience in the economy. However, the slew of central bank meetings and data releases this week could sway sentiment either way. As always, staying nimble and adaptive is crucial to navigating the ever-evolving market landscape.
