April 2024 Wrap Up

What were the key moments in the market this month?

India’s job crisis raises alarm

As India strides into the second phase of its general elections, the spotlight is increasingly shifting towards the pressing concern of unemployment. The “India Employment Report 2024” outlines that unemployment rates significantly elevate among India’s younger population, with individuals aged 15 to 29 constituting a notable 83% of the total unemployed demographic in the country.

“Modi has aggravated unemployment in the country. Those able to provide jobs have been devastated due to demonetisation and wrong Goods and Services Tax regime,” opposition leader Rahul Gandhi said at a rally in the eastern state of Bihar in India.

Aussie inflation misses the mark

In the initial quarter, Australian consumer price inflation decelerated less than anticipated, largely due to persistent upward pressures on service costs, marking a disappointing outcome for policymakers. As a result, the market doesn’t expect interest rates to drop this year. 

Nervous markets went so far as to factor in a slim probability – roughly 4% – of a rate increase by August, while virtually eliminating any likelihood of a rate reduction this year. The anticipated total easing for this year has been drastically reduced to 3 basis points, a significant drop from the previous estimate of 17 bps.

Indonesia’s bold move in rescuing the Rupiah

Indonesia’s central bank made an unexpected move by raising interest rates, aiming to bolster the rupiah currency, which has plunged to its lowest point in four years due to growing risk aversion and delays in anticipated U.S. policy adjustments. Bank Indonesia (BI) lifted the 7-day reverse repurchase rate by 25 basis points to 6.25%, marking its highest level since this rate became its primary policy tool back in 2016.

“This hike in interest rates is to strengthen the stability of the rupiah exchange rate against the risk of worsening global risks,” BI Governor Perry Warjiyo told a briefing.

Bank of Japan holds firm with unchanged rates

Following its recent monetary policy meeting, the BoJ opted to maintain its policy rate, keeping the benchmark rate steady at 0%-0.1%. Additionally, the BOJ affirmed its commitment to continue bond purchases following the decision made in March. 

BOJ Governor Kazuo Ueda emphasised that while the bank’s monetary policy does not directly target currency exchange rates, fluctuations in exchange rates could significantly impact Japan’s economy and prices. Ueda remarked that significant fluctuations in the yen, resulting in notable impacts on economic circumstances and prices, could justify considering a policy adjustment.

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