GLOBAL MOOD: Cautious Risk-OnDrivers: Fed Rate Cut Bets, Tariff Tensions Markets showed a risk-on mood as US equities rebounded sharply on rising hopes of a Fed rate cut and bargain hunting. Weak jobs data and downward payroll revisions drove Treasury yields lower, while oil and dollar remained under pressure. TODAY’S WATCHLIST - Day-2 of RBI MPC Meeting - Earnings: Adani Ports, Bharti Airtel, Britannia Industries, Castrol India, Jindal Saw THE BIG STORYSan Francisco Fed President Mary Daly signalled on Monday that interest rate cuts may soon be appropriate, citing a weakening US labour market and limited inflationary pressures from tariffs. While she supported waiting during last week’s decision to hold rates steady, Daly now sees “every meeting going forward” as a live one for policy changes. She reiterated support for the two rate cuts pencilled in for 2025, noting that the timing—whether September or later—is less important than ensuring a “recalibration” happens. Meanwhile, President Trump renewed criticism of India’s oil trade with Russia, stating that tariffs “paid by India to the USA” would be “substantially” increased. India pushed back strongly, calling the remarks “unjustified and unreasonable,” and pointing out that both the US and EU continue trading with Russia in volumes exceeding India’s. The comments come less than a week after the US announced a 25% tariff and penalty on Indian imports, raising tensions ahead of further trade talks. DATA SPOTLIGHTJapan’s services sector grew at its fastest pace in five months in July, driven by solid domestic demand even as export orders and tourism weakened. The S&P Global Japan Services PMI rose to 53.6 from 51.7 in June, marking the strongest expansion since February. The report underscores resilience in consumer spending despite external headwinds. In the US, factory orders fell 4.8% in June after a sharp 8.3% gain in May, as commercial aircraft bookings retreated. The drop matched economists’ forecasts and highlighted volatility in manufacturing demand. Still, orders were up 3.8% from a year earlier, pointing to moderate underlying growth. Takeaway: While domestic demand in Japan remains firm, the US industrial sector may be losing steam, reinforcing the case for policy easing ahead. WHAT HAPPENED OVERNIGHT US stocks rebound as rate cut hopes and bargain buying lift sentiment All three major indexes posted their biggest one-day percentage gains since May 27, rebounding from Friday’s selloff. Tesla rose 2.2% after awarding Elon Musk 96 million shares worth ~$29 billion. Spotify gained 5% after announcing price hikes for individual premium plans in select markets. Joby Aviation surged 18.8% on its $125 million deal to acquire Blade Air’s passenger business; Blade Air rose 17.2%. US Treasury yields slide to 3-month low weak jobs data and revisions The 10-year US Treasury yield fell to 4.20%, near a three-month low, after a nearly 20 bps drop from Friday’s high. Revised jobs data showed 250,000 fewer payrolls over the last two months, pointing to a softer labour market. July’s payrolls missed expectations, and ISM data showed the sharpest drop in manufacturing jobs this year. US dollar stabilises after sharp losses, but rate cut bets linger The Dollar Index slipped below 99, extending last week’s losses. The US dollar steadied on Monday after a sharp sell-off triggered by Friday’s trio of shocks—a weaker-than-expected jobs report, the resignation of a Fed governor, and President Trump’s dismissal of a top statistics official. Rate cut expectations surged, keeping the dollar under pressure. Crude oil prices after three-day slide on oversupply concerns Brent crude prices fell to a one-week low on Monday after OPEC+ agreed to a significant supply increase for September, deepening market concerns about oversupply. Additional pressure came from weak US fuel demand data, which signalled tepid consumption in the world’s largest oil consumer. Day’s Ledger Economic Data: Australia July Composite, Services PMI Euro July Composite, Services PMI Euro June PPI India July Composite, Services PMI Japan July Composite, Services PMI US June Balance of Trade US July Composite, Services PMI Corporate Action: Earnings: Adani Ports, Alembic Pharmaceuticals, Berger Paints, Bharti Airtel, Bharti Hexacom, BLS International, Britannia Industries, Castrol India, CCL Products, Container Corporation, EIH, Eris Lifesciences, Exide Industries, Gland Pharma, Godawari Power, Gujarat Fluorochemicals, Gujarat Gas, Jindal Saw, Lupin, NCC, Prestige Estates, Torrent Power Paisalo Digital to consider fund raising Power Grid to consider fund raising Policy Events: Bank of Japan Monetary policy meeting minutes Day-2 of RBI Monetary Policy Committee Meeting Tickers to Watch ADITYA BIRLA CAPITAL posted a consolidated PAT of ₹8.35 billion, up from ₹7.59 billion. ATHER ENERGY narrowed its loss to ₹1.78 billion, while revenue surged 79%. AUROBINDO PHARMA posted a consolidated PAT of ₹8.25 billion, down from ₹9.19 billion YoY. BEML signed an MoU with TuTr Hyperloop to co-develop advanced mobility solutions, and secured a defence contract worth ₹2.82 billion. BHARTI AIRTEL’s subsidiary Xtelitiy launched a cloud platform aimed at driving digital transformation. BOSCH reported a sharp rise in net profit to ₹11.15 billion, up from ₹4.66 billion YoY. DLF recorded a consolidated net profit of ₹7.63 billion, compared to ₹6.46 billion YoY. INFO EDGE to invest ₹250 million in its subsidiary via convertible debentures. INOX INDIA reported a 16.1% YoY increase in consolidated PAT, reaching ₹611.18 million. IRDAI imposed a ₹50 million fine on PB Fintech’s subsidiary for regulatory violations. KAYNES TECH unit to invest ₹50 billion in Tamil Nadu over 6 years. SONA BLW saw a decline in consolidated net profit to ₹1.25 billion, down from ₹1.42 billion YoY. VARUN BEVERAGES increased its stake in its South African subsidiary by 0.5%, investing ₹2 billion. MUST READ Tesla to open second India showroom in Delhi’s Aerocity on Aug 11 China’s Ant Group plans exit from Paytm with ₹38 billion share sale Tata Sons-backed Tata Capital files for IPO Despite US tariffs, India faces lower trade disadvantage than South Asian rivals Trump says US to hike India’s tariffs over Russian oil buys EU awaits Trump actions on car tariffs, exemptions this week MUFG chief calls for earlier Bank of Japan rate hike to tackle inflation Soft earnings growth patch nearing its end, says Morgan Stanley Banking system liquidity surplus reaches ₹4.09 trillion amid govt spending See you tomorrow with another edition of The Morning Edge. Have a great trading day. Why India’s ethanol blending push may be hurting more than it helps. TK Arun writes how distorted crop choices to mounting edible oil imports, the Ethanol Blending Programme is distorting incentives and draining fiscal and environmental resources. Maize is displacing soybean, and protein prices are rising. It’s time to rethink E27.
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