India’s exports rose by 50.5% between 1-7 Aug 2021 to US$ 7.4bn, on a YoY basis.

Macro developments

India’s exports rose by 50.5% between 1-7 Aug 2021 to US$ 7.4bn, on a YoY basis. In Jul’21, exports had risen by 47.9% to a record-high of US$ 35.2bn. The increase in Aug’21 was driven by oil (145%), gems and jewellery (121%) and engineering goods (63%). Exports to US, UAE and Saudi Arabia rose the most. Imports also rose by 70% in Aug’21 (1-7 Aug’21) to US$ 10.5bn versus an increase of 59.4% in Jul’21 (US$ 46.4bn). While oil (141%) and electronic (31%) imports rose, gold imports dipped by 12.5% in Aug’21.

Germany’s economic sentiment dropped in Aug’21 as reflected in the ZEW index, which fell from 63.3 to 40.4 (est.: 55). This is the third month in a row that the index has fallen. This was on the back of increasing risks from a possible fourth Covid-19 wave starting in autumn and slowdown in global demand.

Singapore’s GDP rose by 14.7% in Q2CY21 on a YoY basis, higher than the initial estimate of 14.3% and an increase of 1.5% in Q1. The increase in Q2 was largely due to base effect as GDP growth fell by 13.3% in Q2CY20. Manufacturing (17.7%) and construction (106.2%) sectors were the biggest drivers of growth in Q2CY21. The government also raised its GDP forecast for CY21 to 6%-7% versus 4%-6% growth estimated earlier. This was on the back of improved vaccinations both domestically and globally.

Markets

Bonds: Except Germany (stable), global yields closed higher. US 10Y yield rose by 3bps (1.35%) ahead of the CPI print. Senate’s passing of US$ 1tn infrastructure package also boosted sentiments. Crude prices rose by 2.3% (US$ 71/bbl) as US Energy Information Administration raised its forecast for fuel demand in CY21. India’s 10Y yield rose by 1bps (6.23%). It is trading at 6.24% today.

Currency: Global currencies closed mixed. While AUD rose the most (0.2%), JPY fell the most (0.3%). GBP and CNY closed flat. DXY rose by 0.1% ahead of US inflation data. INR depreciated by 0.2% as Brent rose by 2.3%. It is trading further lower today in line with other Asian currencies.

Equity: Global indices ended higher as concerns over the rapid spread of Covid-19 delta variant dissipated. Dow rose by 0.5% after the US Senate passed the US$1tn infrastructure plan. Shanghai Comp (1%) surged the most. Sensex (0.3%) too ended in green led by gains in technology stocks. However, it is trading lower today in line with other Asian stocks.