If emerging markets are to lead global economic performance one again as they did in recent years, an important foundation will be to convince as many people as possible that reported growth data are as accurate as they can possibly be.
For all its single-minded focus on lowering inflation, India’s central bank may be forced to acknowledge slowing growth in Asia’s third largest economy by cutting interest rates — probably faster than it expected.
For all the measures India’s central bank has taken to increase transparency in policy making, predicting rate moves by Governor Raghuram Rajan is still difficult.
Borrowing in dollars is like playing “Russian roulette”, India’s central bank chief Raghuran Rajan said on Bloomberg TV this week.
Volatility is back with a bang.
The Swiss franc leapt by an unprecedented 40 percent at one point after the Swiss National Bank scrapped its currency cap out of the blue. Oil may have bounced but it’s still down the thick end of 60 percent since mid-2014, dragging the rouble and other oil-producer currencies with it. Copper, generally a barometer of world industrial demand, is barely finding its feet after plunging this week.
Euro zone inflation is the big figure of the day. The consensus forecast is it for hold at a paltry 0.5 percent. Germany’s rate came in as predicted at 0.8 percent on Wednesday but Spain’s was well short at -0.3 percent. So there is clearly a risk that inflation for the currency bloc as a whole falls even further.
Indian stocks have rallied sharply over the last two months, soaring to record highs, although the bull run that began with expectations that Narendra Modi will become the country’s next Prime Minister may soon run out of road.