The Reserve Bank of India is facing a fork in the road for the first time since Governor Raghuram Rajan took office amid much fanfare and started targeting inflation as the central bank’s primary mandate.
The International Monetary Fund surprised on the upside with its programme for Ukraine last night, agreeing $17.5 billion in loans as expected but agreeing to pump $10 billion of that into the near bankrupt country over the next year and handing over $5 billion imminently.
U.S. Treasury Secretary Jack Lew moves on to Berlin then Lisbon after spending yesterday in Paris. There, he urged Europe to do more to build up its bank backstops and capital, a fairly clear indication that Washington is underwhelmed by the German model of banking union which has prevailed.
Ten-year Spanish government bond yields hit their highest levels since the euro was created – above 7 percent – on growing doubts that the euro zone’s fourth largest economy will be able to avoid a full-blown sovereign bailout.
By Rahul Karunakar
The spread between 2- and 10-year U.S. Treasury yields will shrink to 180 basis points in a year according to the latest Reuters bonds poll – the narrowest margin since August 2008, the month before Lehman Brothers collapsed.