Corporate bonds – Welcome Echizenshi http://welcome-echizenshi.com/ Mon, 27 Jun 2022 23:20:42 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://welcome-echizenshi.com/wp-content/uploads/2021/06/cropped-icon-32x32.png Corporate bonds – Welcome Echizenshi http://welcome-echizenshi.com/ 32 32 The ES is in range and the bonds are probably in the accumulation phase https://welcome-echizenshi.com/the-es-is-in-range-and-the-bonds-are-probably-in-the-accumulation-phase/ Mon, 27 Jun 2022 23:20:42 +0000 https://welcome-echizenshi.com/the-es-is-in-range-and-the-bonds-are-probably-in-the-accumulation-phase/ It’s starting to look a lot like 2011. The current market environment is unprecedented, for all the obvious reasons. We have never shut down and reopened the global economy, and the government has never been more aggressive in its quest to support economic activity. Nevertheless, we see similarities between equities and commodities that remind us […]]]>

It’s starting to look a lot like 2011.

The current market environment is unprecedented, for all the obvious reasons. We have never shut down and reopened the global economy, and the government has never been more aggressive in its quest to support economic activity. Nevertheless, we see similarities between equities and commodities that remind us of the years following the financial crisis. This makes sense because COVID has revived the same monetary policies rolled out in 2009, only bigger.

In 2011, stock markets corrected after the recovery that began in March 2009. The correction began in February 2011, worsened over the summer and finally ended in October of the same year. Likewise, two years after the March 2020 low, the stock market is digesting the government stimulus rally. However, as the economy has received a much larger artificial jolt as a result of Covid than it did during the financial crisis, the volatility on both sides is greater and the stakes are higher.

Either way, the good news for long-term investors is that 2011 was a tough year, but ultimately it was followed by lower volatility and firm prices. The bad news is that we could be in store for a choppy summer and early fall.

The economy is probably not as healthy as it first appears. For example, the labor market is extremely tight, but the massive number of job openings and the lack of workers to fill them seem to indicate that something is broken, not something that is booming. To elaborate, those who attempt to travel, eat out, or engage in entertainment activities have likely found that life isn’t what it used to be in 2019. Prices are high and service is down. I suspect this will continually discourage consumers from spending money on services, and probably even goods. Also, recessions are sometimes self-inflicted due to altered spender behavior and we seem to be heading in that direction.

Treasury futures markets

30-Year Treasury Bond Futures

The financial media has focused on the spreads between Treasuries and corporate bonds, but the spread doesn’t tell the whole story.

The gap between “default-free” fixed-income assets and corporate debt is one factor analysts look at to determine if there is systematic stress or fear. Currently, the spread between these two assets has depicted economic stability, but we are not convinced that this is a reliable indicator in the current environment. Indeed, economic turmoil typically triggers purchases of Treasuries (flight to safety) and sales of corporate debt (investors liquidate riskier assets). However, the strongest inflation in forty years caused the unusual selling of Treasuries at the same time as corporate bonds; in our opinion, this is not a sign of stability, it is a sign of instability. If this assumption is correct, investors could finally start allocating funds to security assets.

Incidentally, as troubled as the fundamentals are due to simultaneous inflation and recession fears, there is no doubt about the direction the seasonal trends are pointing…higher bonds and lower yields. . The September 10-year note generally moves higher from mid-June to early September.

Treasury futures market consensus:

A close of over 136’0 in the year to Sept. 30 is needed to keep the Bulls in the game. A break above 138’0 confirms a trend change.

Technical support: 134’05, 131’07 and 130’04 ZN: 116’20, 115’20, 114’07 and 113’19

Technical resistance: ZB: 138’01, 142’05 and 148’28 ZN: 118’08, 120’22 and 122’31

Stock Index Futures

The Trendline indicates that 4030 will likely be seen, but the bears are still in charge.

Bearish stock markets are difficult to manage. Unlike uptrends, downtrends are violent. New lows are accompanied by massive bear market rallies capable of making bears doubt their existence. Although we are optimistic at heart and recognize some bullish seasonal patterns in the coming weeks, the chart suggests that the uptrend will struggle to break 4030 (assuming it is visible). Additionally, our work on the longer term charts still calls for a high probability of a print of 3550, but if seen, this could be where the bulls could turn aggressive.

Stock Index Futures Market Consensus:

A break above 4030 could result in a run towards 4300 or 4450, but the more likely scenario is a failed rally that takes the index towards 3550.

Technical support: 3830, 3650 and 3550

Technical resistance: 3960, 4030, 4200, 4320 and 4450

E-mini S&P Futures Swing/Day Trading Levels

These are counter trend entry ideas, the farther the level the more reliable it is but the less likely it is to be filled

ES Day Trade Sell Levels: 3960 (minor), 4030, 4290, 4450 and 4560

ES Day Trade Buy Levels: 3850 (minor), 3810, 3650 and 3550

On other commodity futures and options markets…

October 20 – Buy December 2022 (not 21) $7.00 corn calls nearly 12 cents.

April 20 – Bear put spread with bare call on November soybeans (Buy November put at $15, sell November put at $14 and sell call at $18).

April 21 – Buy March 2023 Eurodollar 98 calls nearly 12 points ($300).

April 21 – Bull call spread with a bare leg on August gold (buy the call at $1975, sell the call at $2075 and sell the put at $1850).

April 22 – Bull call spread with a bare leg in July Silver (Buy the call at $25, sell the call at $26.50 and sell the put at $22).

May 3 – Bear put spread on September corn with a naked call (buy September put 7.40, sell put 6.60 and sell call 9.00).

May 3 – Bear put spread on September Oil with a bare leg (buy September Oil 95 put, sell the 85 put and sell the 120 call).

May 9 – August Live Cattle Purchase 140 calls

May 18 – Buy September wheat at 12.00 put, sell at 11.00 put and sell a call at 15.00.

May 24 – Bear put spread with a naked September nat gas short call (buy the September put at $8.00, sell the put at $7.00 and sell the call at $13.00 for a credit of approx. $1,200 to $1,500).

May 27 – Bull call spread with a bare leg in September wheat (buy the call at $12, sell the call at $13 and sell the put at $10).

June 2 – Buy July coffee 2.30 met.

June 7 – Buy call 139 of the September bond, sell call 143 and sell put 132 for roughly the same amount.

June 8 – Buy July Sugar 19.25 calls around 20 ticks.

June 16 – August butterfly put on Crude Oil, buy August $105, sell 2 puts of $100 and buy $95 for about 55 cents.

June 16 – Buy the August call option at 22.50 on the silver, sell the call option at 23.50 and the put option at 19.50 for a net premium of approximately 10.5 cents.

June 23 – Buy the $6.50 buy price on September natural gas, sell the $7.50 buy price and sell the $5.50 sell price for a net cost of approximately $150.

June 24 – Buy September Corn $7.00/$7.75 for about 19 cents.

Due to time constraints and our fiduciary duty to put customers first, charts provided in this newsletter may not reflect current session data.

Seasonality is already factored into current prices, any reference to it does not indicate future market action.

** There is substantial risk of loss in trading futures and options. ** These recommendations are a solicitation to enter into derivative transactions. All known news and events have already been factored into the price of the underlying derivatives discussed. From time to time, individuals affiliated with Zaner or its affiliates may hold positions in recommended and other derivative products. Past performance does not represent future results. The information and data contained in this report have been obtained from sources believed to be reliable. Their accuracy or completeness is not guaranteed. Any decision to buy or sell resulting from the opinions expressed in this report will be the sole responsibility of the person authorizing this transaction. Seasonal trends are a composite of some of the most consistent commodity futures seasons that have occurred over the past 15 years or more. There are usually underlying fundamental circumstances that occur every year that tend to cause the futures markets to react in a similar directional fashion in a certain calendar year. Although seasonal trends can potentially impact the supply and demand of certain commodities, seasonal aspects of supply and demand have been taken into account in the prices of the futures and options markets. Even if a seasonal pattern occurs in the future, it may not result in a profitable trade as the fees and timing of entry and liquidation may impact results. No representation is made that any account has made or will in the future make any profit using these recommendations. No representation is made that the price patterns will recur in the future.

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Why a perfect storm of financial trouble is the Republican legacy of Reagan’s deregulated economy https://welcome-echizenshi.com/why-a-perfect-storm-of-financial-trouble-is-the-republican-legacy-of-reagans-deregulated-economy/ Sun, 26 Jun 2022 10:05:37 +0000 https://welcome-echizenshi.com/why-a-perfect-storm-of-financial-trouble-is-the-republican-legacy-of-reagans-deregulated-economy/ The Fed has been pumping up the economy since the Bush Crash of 2008, buying US and corporate bonds with money it creates out of thin air (only the Fed can “print money”). money” like that just wanting dollars to exist). By buying and holding these bonds over the past 14 years, the Fed has […]]]>

The Fed has been pumping up the economy since the Bush Crash of 2008, buying US and corporate bonds with money it creates out of thin air (only the Fed can “print money”). money” like that just wanting dollars to exist).

By buying and holding these bonds over the past 14 years, the Fed has created and then injected into our economy $8 trillion in liquidity. This is how the Fed stimulates an economy in crisis: by pouring newly created money into the system.

As a result, our economy has been running since 2008 on high-sugar, high-octane stimulus. Several trillions of that amount came in the last year of the Trump presidency. While Republicans howl about spending on social needs that could also boost the economy, they and Trump were very happy to see that money from the Fed.

But now the Fed and its Trump-appointed Republican Chairman, Jerome Powell, are backing down.

When the Fed started selling these bonds, it reversed the process after 14 years. Instead of stimulating the economy, they try to slow it down in the hope that sucking in money will calm inflation.

When they receive the money from these sales, they will simply deposit it in the same Schrödinger catbox it came from: it will disappear into the icy, dark depths of fiscal interstellar space, never to be seen again. . What the Fed creates, the Fed can dissolve.

This month, the Fed plans to “pull” $47.5 billion off its balance sheet – take that amount out of our economy – to reach $90 billion a month by the end of the summer.

While not huge sums in the grand scheme of things, the very fact that the Fed has gone from pumping money created out of thin air into the economy to pulling that money out is a very big problem.

Add that to his plan to keep raising interest rates, which is also slowing the economy, and we’re looking at a potential Category 5 event.

So the FinancialTimes was the bearer of the predictable bad news yesterday. Just from the ‘Live News Updates’ column on the FT (digital) homepage of that day, here are some of the headlines:

  • Ford plans auto industry consolidation as capital gets tight
  • Treasuries and U.S. stocks slide as investors brace for monetary policy tightening
  • Bank of Canada ready to “act more forcefully” after latest rate hike
  • European stocks enter June on a muted note after a turbulent month
  • German retail sales fell 5.4% in April
  • UK house price growth slows in May
  • Chinese manufacturing activity declines for third straight month
  • Government bonds sell off as eurozone inflation hits record high
  • JPMorgan chief says ‘hurricane’ weighs on economy

In this latest article, JPMorgan CEO Jamie Dimon, who a week ago predicted “storm clouds” over the economic horizon, got much more blunt yesterday.

“I said it’s storm clouds, it’s big storm clouds here,” Dimon said, adding, “It’s a hurricane.”

Noting that the war in Ukraine and Europe’s disconnection from Russian fossil fuel markets could push oil up to $175 a barrel, Dimon worried aloud:

“This hurricane is right out there on the road coming our way. We just don’t know if it’s Minor or Superstorm Sandy. . . And you better get ready.

So how did we get here? Between the Republican Great Depression of 1929-1937 and Reagan’s inauguration in 1981, the United States experienced a few recessions, but nothing as severe as what Republican President Herbert Hoover oversaw on Black Tuesday, October 29, 1929. .

Hoover’s crash was set up by the 1920 election, when Republican Warren Harding convinced Americans to abandon the progressive, anti-confidence policies of Presidents Teddy Roosevelt, William Howard Taft and Woodrow Wilson in favor of the version of this generation of neoliberalism or what we now call Reaganomics.

Harding called it the “horse and sparrow economy” – it was the early 20th century version of what Reagan later reinvented as “trickle down economics.”

If horses (the rich and big business) were fed more oats (thanks to deregulation and tax cuts), more of that oat would pass undigested into the horse manure that then littered the streets of American. The sparrows (working class Americans) could then pick up the extra oats from the manure.

In 1920, Warren Harding won the presidency on a campaign of “more industry in government, less government in industry” – privatize and deregulate – and “a return to normality”, his promise to abolish the top tax bracket of its then -91 percent rate up to 25 percent.

Harding delivered on both his promises, plunging the nation into a frenzy called the Roaring Twenties, where the rich got fabulously rich and working-class people were beaten and murdered by industrialists when they tried to unionize. Harding, Coolidge and Hoover (the three Republican presidents from 1920 to 1932) all applauded the onslaught, using phrases like “the right to work” to describe a union-free nation.

Ultimately, the result of the “horses and sparrows” economy advocated by Harding was the Great Republican Depression – yes, they called it that until after World War II.

FDR’s response to the Hoover Depression was to raise the top income tax bracket to 91% and impose strict regulations on banks and Wall Street, creating the Securities and Exchange Commission (SEC) and entrusting the responsibility to Joe Kennedy.

Gloria Swanson, who knew Kennedy well and didn’t like her at all (he had robbed and exploited her), told me at one of our many dinners in her New York apartment that FDR knew: “You have to a crook to catch a crook. And FDR was chasing the crooks.

High taxes on the government’s morbid and aggressive enforcement of banking and securities rules prevented another full-scale crash for half a century until Reagan came along and repeated Harding’s mistakes in the 1980s.

After Reagan finally lowered the top tax rate from the 74% he inherited when he took office to 28%, there was a one-day stock market crash of 22% – on Black Monday of Oct. 27, 1987 – which rivaled Black Tuesday 1929 for the first time.

When Reagan deregulated the savings and loan industry, bankers stole so much money they destroyed S&Ls across America, the first serious bank run since the Great Republican Depression.

We still live in Reagan’s deregulated neoliberal economy. It brought us two financial crises while he was president, the dotcom bubble of 1999/2000, the Bush Crash of 2008 and arguably the trillion dollar heist of 2020 when Trump handed out cash to his big buddies. without checks (we’re still trying to figure out where all that money went).

Now, if Dimon is right, hang on to your hat for another “event.”

The foundation of Harding’s and Reagan’s versions of neoliberalism is that the economy is essentially a force of nature. This is why Harding removed regulations on stock market speculation and why Reagan deregulated everything he could as fast as he could.

The economy “runs by its own rules”, they would tell you, and anything the government does to interfere with it will simply produce a bad outcome. In fact, the opposite is true.

Players at the top of finance, banking and speculation are much like boxing or football players: they are engaged in high-stakes competitive play defined by very specific rules, and when they know they can get away with breaking these rules, they often will.

The difference is that instead of winning or kicking off a game of football or boxing, when bankers and speculators break the rules, they can wipe out the entire economy.

Financial speculators, of course, are rarely hurt in the process. We bailed out bankers and speculators in the 1980s, 1999/2000, 2008 and 2020 to the tune of trillions of dollars. Senior executives and shareholders took away hundreds of billions of those dollars, plundering the system they themselves had destroyed.

Since 2008, most of this money has been created out of thin air by the Fed. Now the Fed wants it back, but bankers and speculators have already hidden it in their offshore tax havens. As a result, working-class Americans and small and medium-sized businesses will largely foot the bill.

Dimon and the bringers of doom may be wrong about a crisis at this particular time, but the system is still fragile and fraud is rampant in banking, brokerage and finance, as Elizabeth Warren and Katie Porter continually remind us.

As I lay in The Hidden History of Neoliberalism: How Reaganism Drained Americait will likely take another 1929-type event to shake Americans enough to reject Reagan’s vision of a deregulated economy and put the nation back on the stable and steady Keynesian growth path that FDR gave us from 1933 to 1981.

Now, in addition to an economy held together with the Fed’s stimulus thread (which is coming to an end), the United States and the world face a wild array of attacks that could have huge economic impacts.

And Republicans have pledged to do whatever they can to cripple our economy, refusing to embrace much of Biden’s economic agenda, in their belief that a Crash will help them in the 2022 and 2024 elections.

Between the global food and oil crises caused by Russia’s invasion of Ukraine, the billions in climate change damage and the millions of climate change refugees, Republican intransigence and the Fed calling for the 8,000 billions of dollars it has given to our bankers and speculators, a real crisis could be upon us sooner than any of us would like.

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Fubon Financial: Announced by Fubon FHC on behalf of Fubon Hyundai Life for issuance of subordinated unsecured debentures (Supplement to announcement dated 2022/05/30) https://welcome-echizenshi.com/fubon-financial-announced-by-fubon-fhc-on-behalf-of-fubon-hyundai-life-for-issuance-of-subordinated-unsecured-debentures-supplement-to-announcement-dated-2022-05-30/ Fri, 24 Jun 2022 08:36:12 +0000 https://welcome-echizenshi.com/fubon-financial-announced-by-fubon-fhc-on-behalf-of-fubon-hyundai-life-for-issuance-of-subordinated-unsecured-debentures-supplement-to-announcement-dated-2022-05-30/ close Provided by: Fubon Financial Holding Co., Ltd. SEQ_NO 4 announcement date 2022/06/24 Announcement time 16:25:41 Matter Announced by Fubon FHC on behalf of Fubon Hyundai Life for the unsecured subordinated bond issuance (Supplement to the announcement on 2022/05/30) Date of events 2022/06/24 What item it responds […]]]>







close

Provided by: Fubon Financial Holding Co., Ltd.

SEQ_NO

4

announcement date

2022/06/24

Announcement time

16:25:41

Matter

 Announced by Fubon FHC on behalf of Fubon Hyundai
Life for the unsecured subordinated bond issuance
(Supplement to the announcement on 2022/05/30)

Date of events

2022/06/24

What item it responds to

paragraph 11

Statement

1.Date of the board of directors resolution:NA
2.Name [issue no.__ of (secured, unsecured) corporate bonds of
___________ (company)]:Issue of unsecured subordinated bond of Fubon Hyundai
Life Insurance Co., Ltd.
3.Whether to adopt shelf registration (Yes/No):No
4.Total amount issued:150bn KRW
5.Face value per bond:N/A
6.Issue price:N/A
7.Issuance period:10 years
8.Coupon rate:6.20%
9.Types, names, monetary values and stipulations of collaterals:N/A
10.Use of the funds raised by the offering and utilization plan:To strengthen
financial structure and meet the requirements of business plan
11.Underwriting method:Consign underwriters to underwrite the issuance on a
firm commitment basis and by public offering through negotiated sale
12.Trustees of the corporate bonds:N/A
13.Underwriter or agent:Shinhan Investment Corporation/Korea
Investment&Securities
14.Guarantor(s) for the issuance:N/A
15.Agent for payment of the principal and interest:Woori Bank
16.Certifying institution:N/A
17.Where convertible into shares, the rules for conversion:N/A
18.Sell-back conditions:None
19.Buyback conditions:After 5 years from date of issuance, with
the approval of the Regulator, the bonds may be redeemed earlier at
subscription amount plus coupon
20.Reference date for any additional share exchange, stock swap, or
subscription:N/A
21.Possible dilution of equity in case of any additional share exchange,
stock swap, or subscription:N/A
22.Any other matters that need to be specified:Interest rate adjustment
condition 5 years after issuance :10y KTB + spread at the time of issuance

Disclaimer

Fubon Financial Holdings Co.Ltd. published this content on June 24, 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unmodified, on Jun 24, 2022 08:35:04 UTC.

Public now 2022

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06/17 FINANCIAL FUBON : Partial election of an Independent Director at the 2022 Annual General Meeting.

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06/17 FINANCIAL FUBON : Announcement of the change of member of the Audit Committee

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06/17 Fubon Financial Holding Co.,Ltd. appoints Hsiang-Wai Lai as compensation and appointment..

THIS

2022 sales 426B
14,303 million
14,303 million
Net income 2022 112B
3,767 million
3,767 million
Net debt 2022 16,000 million
538M
538M
PER 2022 ratio 6.44x
2022 return 5.18%
Capitalization 818B
27,482 million
27,482 million
EV / Sales 2022 1.96x
EV / Sales 2023 1.77x
# of employees 45,081
Floating 59.5%

Chart FUBON FINANCIAL HOLDING CO., LTD.


Duration :

Period :




Fubon Financial Holding Co.,Ltd.  Technical Analysis Chart |  MarketScreener

Trends in Technical Analysis FUBON FINANCIAL HOLDING CO., LTD.

Short term Middle term Long term
Tendencies Neutral Bearish Bearish



Evolution of the income statement

Sale

To buy

Medium consensus SURPASS
Number of analysts 13
Last closing price TWD61.10
Average target price TWD68.02
Average Spread / Target 11.3%


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Manage Finances Smartly with Mutual Funds: How to Choose Funds to Meet Different Needs in 2022 https://welcome-echizenshi.com/manage-finances-smartly-with-mutual-funds-how-to-choose-funds-to-meet-different-needs-in-2022/ Wed, 22 Jun 2022 07:28:41 +0000 https://welcome-echizenshi.com/manage-finances-smartly-with-mutual-funds-how-to-choose-funds-to-meet-different-needs-in-2022/ Managing finances through mutual funds: how to choose funds to meet different needs? Mutual funds are not just about stocks and stock market concerns. Different types of funds exist, depending on whether one invests in stocks, bonds or money market products. You can choose a fund that suits your needs and risk appetite. You can […]]]>

Managing finances through mutual funds: how to choose funds to meet different needs?

Mutual funds are not just about stocks and stock market concerns. Different types of funds exist, depending on whether one invests in stocks, bonds or money market products. You can choose a fund that suits your needs and risk appetite.

You can divide your finances into four groups based on your financial needs and goals: emergency funds, short-term funds, medium-term funds, and long-term funds. You can manage all these sums through MF programs if you wish.

What is a mutual fund?

A mutual fund is a financial product that pools the money of many investors. The money is then pooled and invested in securities such as stocks of publicly traded companies, government bonds, corporate bonds and money market instruments.

You don’t own the shares of the company that mutual funds buy directly as an investor. You, on the other hand, share the profit or loss equally with the other investors in the pool. The term “mutual” thus describes a mutual fund.

You get the knowledge of the fund manager and the regulatory protection of the Securities Exchange and Board of India (SEBI). The expert fund manager ensures that investors receive the highest possible return.

How do mutual funds work?

Investing in mutual funds is simple. You put money into a fund with a variety of assets. As a result, you don’t have to risk putting all your eggs in one basket.
Plus, you don’t have to worry about keeping up with market changes. The mutual fund company takes care of research, fund management and market monitoring. Therefore, mutual funds are a popular investment option for a wide range of investors.

The Asset Management Company (AMC) is in charge of managing mutual funds. The creation of a mutual fund begins with the pooling of funds from several investors.
The money is pooled and invested in a carefully constructed portfolio of several types of assets like stocks, debt, money market instruments and other funds. As a result, you benefit from diversity, a proven market currency.

Additionally, your money is invested in securities like government bonds, which you could not afford on your own.

The best thing about mutual funds is that a team of professionals, together with the fund manager, selects all the investments that go into building a portfolio. Investments are made in accordance with the stated objective of the mutual fund.

Expert and professional fund management surpasses traditional investment vehicles like bank savings accounts and term deposits.

For your contribution to the common fund, shares will be allocated to you.

Fluctuations in the prices of the underlying assets determine the value of the portfolio. The net asset value (NAV) is calculated by dividing the net assets by the number of units in circulation

A higher net asset value indicates an increase in portfolio value, while a lower net asset value indicates a loss in portfolio value.

mutual fund

Benefits of Investing in Mutual Funds

More than 8000 mutual funds are available in many categories to meet the needs of different types of investors. Mutual funds are great for everyone because they provide the right combination of growth, income, and security.

Here are the benefits of investing in mutual funds:

1. Expert Money Management

A team of specialists manages your mutual funds. You benefit from expert advice on building up assets. When deciding on stocks, sectors, allocation, buying and selling, the fund manager does extensive research.

2. Low cost

When considering the benefits of insight, diversification, and other yield alternatives, mutual funds are clearly a profitable investment vehicle.
The expense ratio is subject to a regulatory cap of 2.5%.

3.SIP Options

A systematic investment plan allows you to invest at regular intervals, such as weekly, monthly or quarterly. You can start investing in mutual funds with as little as Rs. 500.

4. Switch funds

If you are unhappy with the performance of a mutual fund, you may be able to switch funds with certain mutual funds. However, you must exercise extreme caution when changing.

5. Diversification

Mutual funds offer diversity in these asset classes that an individual investor would not be able to achieve. You get the highest exposure with the least risk.

6. Investment and repayment facility

Buying, selling and redeeming fund units at NAV is now quite simple. Simply submit a redemption request and your funds will be sent to the selected bank account within a few days.

7. Tax advantage

You can save money on taxes and build wealth by investing in an ELSS tax-saving mutual fund. You can deduct a maximum of Rs. 1,50,000 per annum under Section 80C of the Income Tax Act.

8. Blocking period

A lock-up period applies to closed-end mutual funds, which means that you as an investor are not allowed to redeem the fund until a certain period has passed.
Long-term capital gains tax benefits are available to you.

mutual fund
How to choose funds to meet different needs?

An emergency fund should contain the funds you need quickly in an emergency. Although it is impossible to predict how much money one might need in the event of an unforeseen event, it is recommended that an employee hold at least six months’ salary in such a fund.

You can park your emergency fund in overnight funds and/or liquid funds in addition to liquid cash and savings bank accounts. Due to the investments of these funds in overnight or very short-dated debt securities, the capital invested is often stable.
Although the returns are minimal, these funds provide plenty of liquidity. You can request a redemption even on Saturdays and Sundays, and if you do so before the cut-off time, the redemption money will be credited to your bank account the next business day.

A short-term fund is used to store the money needed within six months to two years. For example, if a person takes out a loan to build a house and needs to make installment payments over the next 24 months depending on the state of the construction, the money can be placed in a short-term fund.

Since you won’t be able to wait for recovery if your wealth is lost due to market volatility, you should avoid equity exposure and instead invest in low-risk, stable-return products such as debt funds short-term and dynamic bond funds.

The money needed over the next three to four years could be kept in medium-term funds. For example, if you have saved enough money to reach a financial goal of 3 to 4 years through equity investments and you want to limit market risk, you can put it in a medium-term fund.

In this case, you will need to protect your money while earning a higher rate of return to fight inflation over the next three to four years.

Since pure debt funds are unlikely to beat inflation, you can reduce your market exposure from 60-100% to 20-25% by investing the rest of your money in debt funds. Alternatively, you could shift your money from equity funds to conservative hybrid funds and trust experienced fund managers to manage your portfolio.

Money that is not needed in the short or medium term but can be saved for a long time or to achieve long-term financial goals can be invested in long-term funds. The money needed for the education of a child after 10 years or to build up retirement capital to be used after 20 years, for example, could be deposited in such a fund.

Since the goal of a long-term fund is to outperform inflation over time by earning a higher return, you can invest in stocks if you don’t have immediate or medium-term liabilities. The amount of your equity exposure will be determined by the need to take risk to achieve long-term financial goals and your appetite for risk.

You can invest in medium-risk aggressive hybrid funds to very high-risk short-term funds in the equity section – the higher the risk, the better the chance of outperforming returns over the long term.

However, before investing in equity-oriented mutual funds, you must carefully organize your finances and enter the market to achieve your long-term financial goals. Alternatively, if you enter the stock market to increase your returns, you may be forced out during a market downturn if your returns are negative.

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Opinion: The European Central Bank is running out of ammunition to fight another debt crisis https://welcome-echizenshi.com/opinion-the-european-central-bank-is-running-out-of-ammunition-to-fight-another-debt-crisis/ Mon, 20 Jun 2022 17:36:48 +0000 https://welcome-echizenshi.com/opinion-the-european-central-bank-is-running-out-of-ammunition-to-fight-another-debt-crisis/ Almost exactly a decade ago, Mario Draghi, then president of the European Central Bank, promised to do “whatever it takes” to save the euro from destruction. At the time, Greece was on the verge of stumbling – or being pushed – out of the eurozone; Italy, the region’s third-largest economy, was so deep in debt […]]]>

Almost exactly a decade ago, Mario Draghi, then president of the European Central Bank, promised to do “whatever it takes” to save the euro from destruction. At the time, Greece was on the verge of stumbling – or being pushed – out of the eurozone; Italy, the region’s third-largest economy, was so deep in debt that it also seemed like a candidate to leave.

Today, Mr. Draghi is prime minister of a heavily indebted Italy, just when another eurozone crisis may be imminent. Inflation in Italy and the rest of the Eurozone has reached painful levels, sovereign debt yields are rising, economies are in reverse and war in Ukraine – on European soil! – threatens to destabilize the entire region economically and politically.

Except this time he can do next to nothing to prevent another euro calamity in Italy or the European Union. This work will fall to his successor at the ECB, Christine Lagarde, the former boss of the International Monetary Fund.

And guess what? The ECB is running out of ammunition to fight the next crisis. Mistakes have already been made, the biggest of which was abandoning quantitative easing (QE), which is due to end in July, instead of extending it.

QE is a central bank’s massive purchase of government debt and other financial assets, such as high-quality corporate bonds, on the open market to increase the money supply, lower interest rates, and encourage investment and lending. Mr. Draghi seriously introduced QE in 2015 to help keep interest rates at or below zero and stimulate the economy.

It has mostly worked, even if it has worsened income inequality, since it is the wealthy who own financial assets and play in the real estate and stock markets. Since then, the ECB has spent around 6.5 trillion euros on its lavish QE program. It has become the main weapon in Mr. Draghi’s battle to keep the euro, and the eurozone itself, intact and growing.

At the time, the lack of inflation (the ECB’s inflation target is 2% or so) or the potential for outright deflation was one of the big issues. Today it is the opposite. Eurozone inflation was 5.8% in February, the month Russia invaded Ukraine. In May, the rate reached a record high of 8.1%, compared to 7.4% in April.

The culprits are soaring food and energy prices.

Crude oil of the Brent variety has risen by nearly two-thirds over the past year, with most of the increase occurring since the start of the war. Usually the cure for high energy prices is high energy prices. But huge demand for oil as economies recover from the pandemic, coupled with Russian oil embargoes, suggests prices will remain high, unlike in 2007 and 2008, when an oil slump came soon after. prices hit a record high of $147 a barrel. .

Food prices also show few signs of falling, largely due to Russia’s blockade in the Black Sea that prevents Ukrainian wheat, corn and fertilizer exports. Ukraine accounted for 10% of global wheat exports in 2021. By May, those exports were down two-thirds from a year earlier, according to the country’s agriculture agency. In March, the United Nations Food Price Index hit a record high; it has only slightly declined since then.

Prices started to rise before the war started, and only now are central banks getting in on the action. This week, the US Federal Reserve raised its key rate by three-quarters of a percentage point, the biggest increase since 1994, and the ECB is expected to raise rates for the first time since 2011.

Soaring interest rates have already rekindled fears of another debt crisis like the one a decade ago that almost ripped the eurozone apart. Basket case eurozone countries were kept afloat by QE and other unconventional rescue techniques, such as Outright Monetary Transactions (OMTs), which saw the ECB buy the sovereign debt of risky countries .

Italy – the perennial problem child of the eurozone due to its relatively weak economy and crushing debt – is already showing signs of strain.

Italy’s problems are compounded by the need to refinance almost 500 billion euros of global debt, equivalent to 150% of GDP, this year and in 2023. Last Tuesday, fears that it could be unable to sustain debt as borrowing costs rise pushed its 10-year bond yield to an eight-year high of 4.06% (the yield ended Monday at 3.7%). The spread between Italian bonds and German benchmark bonds widened to more than two percentage points.

How will the ECB prevent another debt crisis with rising rates? It must find ways to suppress the borrowing costs of weak eurozone countries to avoid “fragmentation”, loosely defined as an excessive rise in those countries’ bond yields due to investor fears that they will exit the bond market. ‘euro.

Asset purchases are the ECB’s most powerful tool to moderate or reduce borrowing costs. But the bank ends the QE program. Once gone, it will be difficult to revive it, especially since Northern European countries never fully supported QE or OMT, which they saw as ways to reward Mediterranean countries for their dismal economic and fiscal behavior.

QE didn’t have to be killed. It could have operated at low levels and revived fully in case another full-scale debt crisis erupted in the usual suspect countries – Italy, Greece, Spain and Portugal. The ECB can just fend for itself as it usually does. But that may require a bazooka, as was the case during the last financial crisis, if rising borrowing costs threaten to cripple weak countries. The problem is, he doesn’t really have any now that QE is AWOL.

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Investing: Buy bonds now? It depends | Economic news https://welcome-echizenshi.com/investing-buy-bonds-now-it-depends-economic-news/ Sun, 19 Jun 2022 02:30:00 +0000 https://welcome-echizenshi.com/investing-buy-bonds-now-it-depends-economic-news/ I insist that it is madness to abandon sound investments because of a bad quarter, but the early 2022 bond market slump is testing my resolve. When great things like tax-exempt toll highway bonds, taxable infrastructure municipalities, and BBB companies suffer losses of 6% to 10%, it’s a real shock and awe. The last time […]]]>

I insist that it is madness to abandon sound investments because of a bad quarter, but the early 2022 bond market slump is testing my resolve. When great things like tax-exempt toll highway bonds, taxable infrastructure municipalities, and BBB companies suffer losses of 6% to 10%, it’s a real shock and awe.

The last time yields took a hit was the ‘tantrum’ of summer 2013 when, despite no inflation, traders overreacted to Federal Reserve plans aimed at reducing bond purchases. This episode is now remembered as an epic buying opportunity. Thus, it is tempting to interpret the current slowdown in the same way.

With inflation high, there won’t be another raging bull market until then. But bond specialists are betting that parts of the bond universe will stabilize or recover somewhat.

Jason Brady, CEO of Thornburg Investment Management, says he’s starting to seize on interest rate-sensitive IOUs. “I can buy investment-grade solid credit at 4% that not too long ago was 1%,” he reasoned. Megan Horneman, Chief Investment Officer of Verdance Capital, said, “I don’t think we will accept these types of losses in the coming quarters.” She said bonds remain “contested” but urges investors to “remember why you are buying fixed income”.

People also read…

Why do you buy bonds and bond-like investments? Your answer should indicate what you will do next. If you’re using bonds for growth in addition to income, you may find it’s too early to buy, although it certainly seems too late to sell.

If cash flow and diversification dominate, consider some opportunities. It’s smart to slip into disadvantaged investments when the results are still poor, but the outlook isn’t as dire as it used to be. Here’s why: Inflation may be lower than you think. The bond market pegs year-end inflation well below the headlines in the consumer price index. The Federal Reserve Bank of Atlanta’s Inflation Project pegs the 2022 balance sheet at 4.5%. This alleviates fears that inflation will drive interest rates back to 1980s levels and further crush bond yields.

Higher coupon rates on new issues and lower bond prices provide better entry points. Municipalities were expensive at the end of last year, yielding less than 70% of the yield of Treasuries. Now the ratio is 93% for 10-year maturities and 104% for 30-year tax-exempt, which is a good precursor for munis to outperform over the next few months. The yield advantage of corporate bonds and mortgage-backed securities over Treasuries is also widening. People are still buying homes, but they’re no longer able to refinance, ideal conditions if you’re investing in mortgage bonds.

Individual links are unscathed. If you own a collection or ladder of single bonds, daily market prices are irrelevant. Instead, you may find that if you get the principal back when it matures, you can reinvest it at a better rate than you imagined. There are few defaults and once risky debtors such as oil drillers and commercial real estate companies are profiting from inflation in energy prices and rents. People are paying their car loans, their mortgages, and their credit card bills. If your priority as an investor is getting your money, it’s always wise to be a lender.

Visit Kiplinger.com to learn more about this and similar money-related topics.

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Swedish central bank picks FSA’s Thedeen as new head as Ingves era ends https://welcome-echizenshi.com/swedish-central-bank-picks-fsas-thedeen-as-new-head-as-ingves-era-ends/ Fri, 17 Jun 2022 13:41:00 +0000 https://welcome-echizenshi.com/swedish-central-bank-picks-fsas-thedeen-as-new-head-as-ingves-era-ends/ Ingves steps down after 17 years as Riksbank Governor The head of financial monitoring will take office at the end of the year New leader must balance inflation worries with economy STOCKHOLM, June 17 (Reuters) – Sweden’s central bank said on Friday it had named Erik Thedeen, head of the national financial regulator, as its […]]]>
  • Ingves steps down after 17 years as Riksbank Governor
  • The head of financial monitoring will take office at the end of the year
  • New leader must balance inflation worries with economy

STOCKHOLM, June 17 (Reuters) – Sweden’s central bank said on Friday it had named Erik Thedeen, head of the national financial regulator, as its new chief, ending speculation over who will replace longtime governor Stefan Ingves when he leaves at the end. of the year.

With the war in Ukraine dragging on and no sign of inflation abating, Thedeen will struggle to balance policy tightening against the risk of an economic slowdown.

Ingves has headed the Riksbank since 2006, while Thedeen has worked in the finance ministry, headed the Nasdaq stock exchange in Stockholm, the government’s debt office and currently heads the Swedish Financial Supervisory Authority (FSA).

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“His experience in managing financial authorities and organizations makes him well suited to become the new governor of the Riksbank,” the central bank’s General Council said in a statement.

Thedeen and Ingves have previously clashed over the central bank’s role in financial stability, with Ingves believing that the Riksbank should have major political responsibility there instead of the FSA.

Thedeen’s appointment could see some formal supervisory powers transferred to the Riksbank, Capital Economics said in a note.

“At the margin, more active macroprudential policy going forward could limit the scale of rate hikes needed in future tightening cycles,” said David Oxley, senior economist for Europe at Capital Economics.

The replacement for Senior Deputy Governor Cecilia Skingsley, who earlier this month said she would step down in August and has been widely tipped to succeed Ingves, has yet to be announced.

NEW LAND

Ingves, who led the overhaul of Sweden’s financial system after a crash in the early 1990s, oversaw a turbulent time at the central bank.

The Riksbank cut rates below zero after the 2008-09 financial crisis – an untested measure – to push inflation towards the central bank’s 2% target.

Rates have remained negative for about five years and the central bank has drawn widespread criticism for pursuing ultra-loose policy long after the economy has recovered from the crisis.

During the pandemic, Ingves was again forced to innovate, with the central bank launching a program of asset purchases, loans and other measures to keep the economy afloat.

Many analysts disagreed with the decision to buy mortgage-backed bonds, fearing it could further fuel an overheated housing market, as well as corporate bond purchases.

Although the measures have helped stabilize the economy, household debt levels remain a concern, especially as the Riksbank embarks on what is expected to be a series of rapid rate hikes. Read more

Thedeen will serve a six-year term. He will take office on January 1 and attend the monetary policy meeting in February 2023.

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Reporting by Stine Jacobsen and Simon Johnson; Editing by William Maclean, Chizu Nomiyama and Tomasz Janowski

Our standards: The Thomson Reuters Trust Principles.

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Investors expect interest rates to rise by 0.75 percentage points https://welcome-echizenshi.com/investors-expect-interest-rates-to-rise-by-0-75-percentage-points/ Wed, 15 Jun 2022 14:04:00 +0000 https://welcome-echizenshi.com/investors-expect-interest-rates-to-rise-by-0-75-percentage-points/ Italian stocks rallied and government bond yields fell further as the European Central Bank pledged fresh support for fragile southern eurozone economies. The yield on Italian 10-year government bonds was recently at 3.775%, down from around 3.8% before the announcement. On Tuesday, Italy’s benchmark borrowing cost hit 4.19%, the highest level since 2013. Bond yields […]]]>

Italian stocks rallied and government bond yields fell further as the European Central Bank pledged fresh support for fragile southern eurozone economies.

The yield on Italian 10-year government bonds was recently at 3.775%, down from around 3.8% before the announcement. On Tuesday, Italy’s benchmark borrowing cost hit 4.19%, the highest level since 2013. Bond yields are falling as prices rise.

Italy’s benchmark FTSE MIB stock index was one of the best performers in Europe, up 2.8%. Italian bank stocks surged. FinecoBank rose 7.1%, while UniCredit gained 4.8%. Intesa Sanpaolo increased by 5.3%.

A key measure of financial stress in the eurozone – the difference between the yield on Germany’s benchmark 10-year government bond and its Italian equivalent – narrowed to 2.15 percentage points from 2.4 percentage points on Tuesday. This gap had reached its highest level since 2020 in recent days.

Market relief came after the ECB announced its intention to address the recent spike in borrowing costs for southern European economies. The ECB said it plans to reinvest with “flexibility” the proceeds of bonds redeemed under its pandemic emergency bond purchase program, known as PEPP.

Seamus Mac Gorain, head of global rates at JP Morgan Asset Management, estimated that this could amount to around 200 billion euros, or $208 billion, in additional bond purchases this year. These would be targeted at struggling economies like Italy.

“It’s gradually helping, but I don’t think it’s big enough to change the situation,” he said.

The ECB also said it would start working on a broader tool to address risks of fragmentation within the bloc, although it did not provide details.

The euro, which had risen almost 1% earlier in the day against the dollar, gave up its gains to trade flat.

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Inflation fears drive US bond yields higher ahead of Fed meeting https://welcome-echizenshi.com/inflation-fears-drive-us-bond-yields-higher-ahead-of-fed-meeting/ Mon, 13 Jun 2022 21:44:00 +0000 https://welcome-echizenshi.com/inflation-fears-drive-us-bond-yields-higher-ahead-of-fed-meeting/ U.S. government bond yields closed Monday at their highest levels in more than a decade, propelled by fears that persistent inflation could push the Federal Reserve to raise interest rates even higher and faster. provided that. The yield on the benchmark 10-year Treasury note stood at 3.371%, according to Tradeweb, its highest close since April […]]]>

U.S. government bond yields closed Monday at their highest levels in more than a decade, propelled by fears that persistent inflation could push the Federal Reserve to raise interest rates even higher and faster. provided that.

The yield on the benchmark 10-year Treasury note stood at 3.371%, according to Tradeweb, its highest close since April 2011 and up from 3.156% on Friday. The two-year Treasury yield — which often rises with expectations of Fed rate hikes — rose to 3.279%, a new 15-year high, from 3.047% on Friday.

The surge in after-hours bond trading, which took the 10-year yield briefly above 3.4%, following a Wall Street Journal report that Fed officials were likely to consider raising interest rates 0.75 percentage points higher than expected this week to fight inflation. Friday’s data showed consumer prices rose at an annual rate of 8.6% in May, putting inflation at its fastest pace since the 1980s, despite measures the Fed has already taken to cool the economy.

Traders quickly raised their expectations for the magnitude of the Fed’s next interest rate move. Late Monday, federal funds futures, used by traders to bet on central bank policy, showed a roughly 28% chance that authorities would raise rates by 0.75 percentage points this week. , up from around 3% a week ago.

The inflation reading also boosted expectations for the Fed’s benchmark rate hike. Investors now expect officials to hike rates to nearly 4% by next spring, from the expected peak of around 3% last month.

Fed officials have signaled that raising interest rates to bring inflation down is their top priority. The central bank’s 0.5 percentage point rate hike at its May meeting — after a smaller increase in March — was already the most aggressive rate hike the Fed has made in more than 20 years.

On the other hand, an even faster rate hike would challenge previous central bank guidance, and some analysts have said it will be harder for the Fed to monitor the effects of tighter monetary policy, which is essential to help policy makers avoid tipping the economy into a recession.

Going too fast would be “like looking in your rearview mirror and realizing you missed your exit,” said Gennadiy Goldberg, senior U.S. rates strategist at TD Securities.

Treasury yields had already soared this year as rising inflation quickly changed traders’ expectations of Fed policy. The rise in the 10-year yield rattled US equity valuations, sending major indexes tumbling. Higher yields on ultra-safe bonds diminish the appeal of riskier Wall Street bets.

On Monday, the S&P 500 fell 3.9%, a decline that sent the index into bear territory, defined as a 20% drop from a recent high. The tech-heavy Nasdaq Composite fell 4.7%.

In another sign of bond traders’ concerns, the sale of new, short-term Treasury debt yielded some of the weakest results in years. Monday’s auction of new three-month bills ended with a yield 0.09 percentage point above traders’ expectations, the biggest difference since September 2008, when markets were rocked by the financial crisis world, according to analysts at Jefferies.

Rising Treasury yields raise costs for borrowers across the economy, from businesses to homebuyers. Corporate bond yields have risen this year even more than Treasury yields as investors demand higher premiums to lend money to companies. Residential mortgage rates have also surged, hitting their highest level since 2009 last month. Local governments are issuing fewer new bonds, investors are becoming more discerning about buying specialty debt securities and the booming real estate market is showing signs of improvement. signs of slowing down.

Although concerns are growing about how rising rates will affect economic growth, high inflation could force the Fed’s hand, some analysts said.

“Fed officials who very recently expressed hope that inflation would ease over the course of the year will now face an accelerating price backdrop despite rapidly tightening financial conditions,” the economists wrote. of Citigroup.

Write to Matt Grossman at matt.grossman@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Should investors consider liquid funds or target maturity funds when rates rise? https://welcome-echizenshi.com/should-investors-consider-liquid-funds-or-target-maturity-funds-when-rates-rise/ Sat, 11 Jun 2022 05:43:55 +0000 https://welcome-echizenshi.com/should-investors-consider-liquid-funds-or-target-maturity-funds-when-rates-rise/ Sunil Subramaniam: We tend to look at the RBI thing from a narrow perspective of inflation versus growth. But it’s important to keep in mind that RBI wears three hats. There is a monetary policy hat, there is an interest rate hat which I differentiate slightly from the liquidity aspect, and then there is a […]]]>

Sunil Subramaniam: We tend to look at the RBI thing from a narrow perspective of inflation versus growth. But it’s important to keep in mind that RBI wears three hats. There is a monetary policy hat, there is an interest rate hat which I differentiate slightly from the liquidity aspect, and then there is a currency management hat. On top of all that, there’s the fact that they’re the manager of the government’s debt book. So they have several things to do.

The second thing is that we tend to equate RBI policy with US Fed policy. RBI as the central banker and the Fed as the central banker. We tend to think that the actions of the Fed should be emulated by the RBI and we tend to carry the same objective.

But there are two key differences. The first difference is that advanced countries are demand-driven economies where rates and liquidity flow directly to the retail consumer and directly cause or reduce inflation, whereas India is a supply-driven economy . In a supply-driven economy, interest rate policy has a limited role to play because supply can affect interest rates on corporate borrowing, but not so much by the consumer on the ground, because either way demand is not the key.

Thus, the ability of interest rate policy to influence GDP and inflation is one. The second thing is the amount of inflation imported into a country like India, which again is not within the purview of an RBI policy. No political interaction or intervention can do anything about importing oil, importing food and the third and most important thing here is that the Fed doesn’t care about currency. Thus, RBI must keep an eye on the management of volatility in the country. They do not target an exchange rate that manages volatility.

So if you look at it in the context of what the RBI did today, it was very good policy, very pragmatic in the sense that they know that frontloading 50 basis points of the upside – c It’s actually up 90 basis points if you take between the last policy and this. So frontloading is basically giving them the chance to boost growth when the supply slackens. That’s why they pre-feed and (don’t) react. The reason the Fed is hesitant to preload is that frontloading directly affects demand growth, whereas in India it does not. So there is no downside to frontloading. It’s only a sentimental thing. It’s a visual thing that I’m planning a hike.

But at ground level, if home loan rates rise 1% – from the 6.5% average they were before those hikes – to 7.5%. What is the impact on EMI for a customer? It’s probably Rs 100-200 per month on a 25-30 year loan. Thus, the RBI policy has more of a signaling effect, rather than an actual reality, ground level effect.

And signaling early frontloading, and maybe another 40-50 basis point hike as well because they were forecasting inflation at 6.7%, which is way above their thing, but they let a small window for the last quarter of the year where they showed it to come below 6%.

So there’s a hint in the policy that if the monsoon is normal and we see food inflation – which is 45% of our CPI basket – go down, then RBI retains the desire to hold rates there or can even to cut rates to support growth in the last quarter of the year. It is hidden in the tongue. But the way I see it is that’s why he broke four quarters.

For me, it is very pragmatic in a country like India to preload because the Fed preloads; it hurts where it hurts most, hitting almost below the belt because consumers are directly affected.

So, RBI laid off on the liquidity front. They talked about reducing accommodation over a period of years. So, liquidity is also something that RBI avoided in strong action today.

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