The Morning Edge

Governor Christopher Waller thinks that waiting for economic uncertainty to clear is a recipe for policy paralysis and that the Federal Reserve would act based on incoming data rather than external noise. While recent economic indicators support keeping interest rates steady, he thinks that if inflation trends mirror 2024, policymakers could resume rate cuts at some point this year. Despite the uncertainty introduced by the new Trump administration’s trade policies, Waller expects that monetary policy will not be delayed in response. Waller expects that the administration’s tariffs are expected to have a modest, non-persistent impact on inflation, but he cautioned that price pressures could exceed expectations. He also pointed to other policy measures under discussion that could enhance supply conditions and help contain inflation. Describing the broader economy as solid with a labour market in a sweet spot, Waller underscored the Fed’s commitment to data-driven decisions, reinforcing that rate moves will depend on how inflation evolves rather than speculation or external pressures..

Data

India’s merchandise trade deficit widened to nearly $23 billion in January, up from $16.5 billion a year earlier, as exports fell amid weak global demand for petroleum products and economic uncertainties. Data from the commerce department showed exports declined 2.4% year-on-year to $36.43 billion, while imports surged 10% to $59.4 billion, raising concerns over the rupee’s depreciation.

The import bill was driven by sharp increases in gold (40.8%), electronic goods (17.8%), and chemicals (71.8%), though crude oil imports dropped 13.5%. On the export front, a steep 58.7% decline in refined petroleum shipments due to falling global prices and subdued demand weighed on trade performance.

The widening deficit highlights challenges posed by a sluggish global economy and fluctuating commodity prices.

Markets

Overnight

The US stock and bond markets were closed for Presidents' Day.

The US dollar index held steady at 106.76 on Monday, hovering near a two-month low after tumbling 1.2% last week, as investors dialled back expectations of aggressive U.S. tariffs. The greenback’s weakness was further highlighted by a 0.58% drop against the yen, which strengthened to 151.44 following upbeat Japanese growth data that showed the economy expanded more than expected in the fourth quarter, driven by improved business spending and a surprise rise in consumption. The yen’s gains underscored the currency’s appeal amid shifting market sentiment and a softer dollar outlook.

Crude oil prices strengthened on Monday as an attack on an oil pipeline pumping station in the Caspian Sea slowed flows from Kazakhstan, while investors monitored developments of a possible Moscow-Kiev ceasefire agreement that could ease sanctions and increase global supplies. The dollar index, which hovered near a two-month low after weaker-than-expected US retail data for January, also boosted oil prices by making crude less expensive for non-US buyers. Brent crude futures settled at $75.22 a barrel, rising 48 cents.

Day’s Ledger

Economy

• UK Employment Data 
• German ZEW Economic Sentiment Data
• US NY Empire State February Manufacturing Index 

Companies

• Gujarat Inject (Kerala) to consider stock split
• Ranjeet Mechatronics to consider rights issue of shares
• Kumbhat Financial Services to consider preferential issue of shares
• MRP Agro to consider preferential issue of shares
• Punjab Communications to announce December quarter earnings 

Policy

• Reserve Bank of Australia to Announce Interest Rate Decision 
• US Federal Reserve Board of Governors member Waller Speaks
• Bank of  England Governor Bailey Speaks
• US FOMC Member Daly Speaks  
• German Bundesbank Balz Speak 

Tickers 

• ABB INDIA reports 56% surge in December quarter net profit to ₹5.28 billion.
  
  
• ALLCARGO TERMINALS’ container freight station volumes in January 2025 increased by 11% on year and 4% on month.
  
  
• BHARTI AIRTEL promoter entity Indian Continent Investment is likely to sell a 0.8% stake in Airtel via block deals.
• GABRIEL INDIA has executed a license agreement with Marelli Suspension Systems Italy S.p.A (Marelli Italy) for the grant of a license to manufacture, assemble, sell, distribute, and market certain products in India .
  
  
• GMR AIRPORTS reports passenger traffic in January 2025 grew by 11% on year to 10.6 million, but it was down by 2% compared to the previous month .
  
  
• KARNATAKA BANK has identified certain deficiencies in the reconciliation process during the review of suspicious UPI Global transactions.
  
  
• NTPC intends to invest $62 billion in 30 GW of nuclear power.
  
  
• ONE 97 COMMUNICATIONS’ subsidiary, Paytm Services, has signed a partnership with SBI Mutual Fund to launch the JanNivesh ₹250 SIP.
  
  
• SBI CARDS AND PAYMENT SERVICES approved the appointment of Salila Pande as Managing Director & CEO for two years.
  
  
• THOMAS COOK INDIA group company SOTC Travel, has signed an agreement with Malaysia's Sabah Tourism Board.
  
  
• TRANSFORMERS AND RECTIFIERS (INDIA) subsidiary, TARIL Switchgear, has launched the 245 kV high-voltage bushings.
  
  
• VIKAS LIFECARE, along with one of its promoters and certain other individuals, has been included as noticees in a Show Cause Notice issued by the SEBI regarding certain trading transactions in the scrips of another BSE-listed company.
  
  
• ZOMATO introduced Nugget, an AI-native, no-code customer support platform. Nugget is the first product from Zomato Labs. Zomato is now opening Nugget for businesses worldwide.

Must Read

• SEBI bans PMS with more than ₹2 billion AUM from onboarding new clients
• Govt considering raising deposit insurance limit above current Rs 5 lakh: Official
• Gyanesh Kumar becomes first CEC appointed under new rule: Law ministry
• India's exports to US increase 39% to $8.44 bn in January: Govt data
• Airtel lands subsea cable in Chennai to connect India to Singapore, France
• India-US to start discussions on proposed trade deal soon
• Samsung India strike to intensify as CITU plans fresh protests across industrial hubs
• European countries clash over sending troops to Ukraine
• BJP to pick new Delhi CM on Feb 19, oath-taking on 20
• Fed’s Waller Favors Pausing Rate Cuts Until Inflation Bump Fades
• Delta Plane Flips Upside Down in Toronto Landing, 15 Hurt

Daily Mantra
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