IGI Logo

"Trump 2.0 has kicked off without much clarity on Trump’s likely economic decisions. In his inaugural address he was clear on immigration but sounded vague on tariffs. The indication of a likely 25% tariffs on Canada and Mexico suggests that the tariff hike policy will be implemented gradually. The currency market has reacted with a cut in the dollar index to 108.43 and the 10-year bond yield has declined to 4.54%. This is the classic case of ‘buy on rumours and sell on news.’ It is likely that further delays in tariff hikes will weaken the dollar and bring down the bond yields. If this happens, it will be good for emerging markets like India. But if the FII flows to India are to turn positive consistently, we will have to see a pick -up in India’s GDP growth and corporate earnings. That’s the crucial macro data to watch."

 

Above views are of the author and not of the website kindly read disclaimer