- Wealth PMS (50L+)
Things are happening very fast. The 10-year bond has now moved very quickly back up to nearly 9%.
And the dollar is now 67.4, the worst it has ever been.
And Gold is Rs. 33,000 (per 10 g) which is again the highest ever.
Crude oil went up to $110 per barrel on fears of the US attacking Syria. And that, coupled with the all time low on the rupee, means crude imports – the biggest by a factor of 2 for India – is at an all time high.
The fears of a US taper has killed most emerging currencies and markets. Things look bad for everyone.
This is now despite multiple rounds of intervention by RBI selling dollars, OMO purchases of bonds by RBI, assurances by the government that we shouldn’t panic, and massive attempts to curb speculation of any sort in the currency market.
It should now be obvious that the exodus of foreign investors, the ballooning fiscal deficit, the impending inflation, the lack of confidence in markets, the impunity with which people commit sin and fraud – these are all related. It might not just be the foreign markets that are co-suffering.
This is a perfect storm when looked at in isolation. But when you have no spine, even the smallest of winds can break you. And this wind, it’s quite strong.
To subscribe to new posts by email, once a day, delivered to your Inbox:
Also, do check out Capital Mind Premium , where we provide high
quality analysis on macro, fixed income and stocks. Also see our
portfolio which has given stellar returns in our year, trade by trade
as we progress. Take a 30-day trial: