Fed’s Bowman Says Big Banks’ Secret Ratings Will Be Addressed

Trade talks between Indian and U.S. officials have been extended into next week as both sides seek consensus on tariff cuts in the farming and auto sectors, aiming to finalise an interim deal before a July 9 deadline, Indian government sources said.

A U.S. delegation led by senior officials from the Office of the United States Trade Representative (USTR) held two days of discussions in New Delhi with Indian trade officials headed by chief negotiator Rajesh Agrawal, the sources said.

"The two countries are actively engaged in focused discussions to facilitate greater market access, reduce tariff and non-tariff barriers, enhance supply chain resilience and integration," one Indian government official with direct knowledge of the talks, said.

Negotiators, who had initially aimed to wrap up talks by Friday, will now continue discussions on Monday and Tuesday to resolve outstanding differences, a second Indian official said.

U.S. President Donald Trump and Indian Prime Minister Narendra Modi had agreed in February to conclude a bilateral trade pact by fall 2025 and more than double trade to $500 billion by 2030.

The current talks are part of efforts to hammer out a limited trade agreement that could lead the Trump administration to revoke 26% reciprocal tariffs on Indian goods - tariffs that have been paused along with those on several other U.S. trading partners for 90 days, the second official said.

"Many Indian exporters have held back shipments to the U.S. in the last two weeks, fearing cargos may not reach before the July 9 deadline,” the official added.

India’s exports to the U.S. jumped nearly 28% year-on-year to $37.7 billion in the January–April period, driven by front-loading of shipments ahead of tariff hikes in April, while imports rose to $14.4 billion, widening the trade surplus in India’s favour, according to US government data.

India approved a licence for Elon Musk's Starlink to launch commercial operations, ignoring his public spat with Trump, Reuters reported on Friday.

India is opposing U.S. demands to open up its agricultural and dairy markets, another Indian official said, citing the impact on millions of poor farmers who cannot compete with heavily subsidised American products.

Indian officials have also made it clear New Delhi could pursue its complaint at the World Trade Organisation against the U.S. tariff hikes on steel and aluminium, while aiming to work out a bilateral agreement, the source added.

Source: Yahoo Finance

Prime Minister Narendra Modi will be attending the Canada-hosted Group of Seven summit later this month as ties between the two nations improve.

The South Asian country is not a member of the G-7, a grouping of seven of the world’s richest countries, comprising the US, UK, Germany, France, Italy, Canada and Japan. However, it has been invited to join the summit every year since atleast 2019.

In a post on X, Modi said Canadian Prime Minister Mark Carney invited him to the G-7 summit and he looks forward to their meeting.

Carney’s office didn’t immediately reply to a request for comment.

The development signals improving relations between the two nations, which have been frayed over the Modi government’s alleged involvement in homicides and extortion targeting Sikhs in Canada who advocate for carving out a separate homeland for followers of the faith.

The rift started in September 2023 when then-Prime Minister Justin Trudeau accused Indian officials of masterminding the assassination of prominent Sikh activist Hardeep Singh Nijjar, a Canadian citizen. The Indian government denied any involvement, calling the accusations absurd.

The invitation comes as the South Asian nation is expected to overtake Japan and become the fourth-largest economy by March next year, according to estimates by the International Monetary Fund, though it will still be among the world’s low per-capita economies.

Source: Bloomberg Europe

Indian households expect price pressures to stay low over the next 12 months, surveys by the Reserve Bank of India showed.

In the May round of surveys on inflation expectations, released Friday, households’ perception of current inflation declined 10 basis points from the previous poll in March, while they expected inflation to moderate by 20 basis points a year from now.

In such surveys, the direction, rather than the absolute level, is important. The reviews were conducted during May 2-11 in 19 major cities, with 6,079 responses. Inflationary pressures “eased across major product groups including food products and non-food items,” the RBI said.

The Reserve Bank of India on Friday surprised with a half point cut in interest rates as growth prospects dimmed and inflation eased. Governor Sanjay Malhotra declared victory over inflation in a post-policy press conference.

Meanwhile, two separate surveys on consumer confidence in urban and rural areas showed households remain generally optimistic about the future, though their expectations about the current period remained largely unchanged from the previous rounds of studies.

Source: Bloomberg Europe

As I discussed here yesterday, the “end of US exceptionalism” theme is now a pretty mainstream view. There was a brief period where the idea of global diversification was withering on the vine.

Going “all-in” on America started to seem like the rational choice in a world where all the leading tech stocks were in the US, and where any decade-spanning chart of past performance would show that diversification simply didn’t pay versus a simple S&P 500 tracker.

But while it’s a cliche, there is actually some truth to that “past performance is not an indicator of future performance” boiler plate. It took the return of Donald Trump to catalyse it, but so far at least, it seems that the “rest of the world” is catching up with the US market after a lengthy period of underperforming.

Bloomberg held a “Money & Macro” event in New York yesterday, and I found comments from one panellist very informative (I hasten to add, I read the write-up, I wasn’t in the room).

Monica Dicenso, Head of Global Investment Opportunities at JPMorgan Chase Bank, noted that the company’s discretionary portfolios have moved from “overweight” to “neutral” on the US, and that clients are keen to spread their risk. “When I have that conversation, people are saying, give me something outside of the US,” she said.

Now, I think it’s important to note that we’re not talking about investors scrambling to get out of the US. This isn’t like the denouement to the tech bubble, say. Investors aren’t thinking “argh, I need to lock in my US profits before the whole thing collapses.” They’re just starting to see more appealing opportunities elsewhere.

However, it does imply that the weight of capital flows that have been piling into the US will diminish, while the capital flows going elsewhere will increase.

Passive investing has come to dominate a great deal of global capital allocation. So this shift may have some interesting effects. It might mean that the stocks that benefited the most from automated inflows struggle more as the shift occurs, for example.

But I think what’s probably more interesting for investors is thinking about who the winners might be. It’s one thing when a massive market accustomed to massive inflows sees those inflows diminish a bit. It’s another when a smaller market accustomed to weak flows suddenly sees a lot more money coming in.

Undervalued And Underappreciated

As I also said yesterday, this strikes me as a good opportunity for any country looking to cultivate a healthy and growing equity market investment culture. Which is why it’s a shame, as my Bloomberg Opinion friend Chris Hughes points out, that the UK is doing anything but.

However, the UK is not the only global market out there, and the good news is that plenty of other markets are also appealing after long periods of underperformance.

Firstly, there’s the question of governance. The late David Fuller, a brilliant financial markets analyst, used to say “in emerging markets, governance is everything.” What’s interesting to me now is that the governance gap seems to be closing between “emerging” and “developed” markets quite sharply and along several dimensions.

One guest at the conference was Chile’s former finance minister, Ignacio Briones, who discussed the tricky topic of pension reforms. An audience member asked about the country’s priorities for the coming years.

Briones emphasised the point that both the left and right-wing parties fundamentally agreed on issues like growth being critical to living standards (with all faddish talk of “degrowth” thrown out), and that infrastructure needs to be easier to build, and corporation tax more competitive.

Chile is hardly the least politically stable emerging market. This is not an astonishing transformation. But what struck me was that he was basically describing “consensus” politics as many in the UK used to whine about in the early 2000s, and now pine desperately for.

Moreover, there are plenty of countries in Latin America which have seen significant improvements to the political environment. As an obvious example, Argentina’s experiment with a form of libertarianism may yet go wrong, but so far it’s done a lot better than anyone expected.

If capital starts to feel more welcome in these economies at a time when the US appears to be actively trying to discourage foreign capital — well, capital typically doesn’t need to be told twice.

Secondly, Louis Vincent-Gave, chief executive of consultancy Gavekal, made the good point that amid the US retreat from the world, Latin America has the advantage of still being part of what the US views as its sphere of influence.

That gives the region an important advantage in terms of being more sheltered from hostile US economic policies. Moreover, most countries in Latin America still have considerable room to cut interest rates, which tends to be good news for domestic markets.

In short, if you’re looking to get a bit of diversification into your portfolio, then this looks like yet another underappreciated and undervalued region to dig into.

Source: Bloomberg Europe

U.S. money market funds witnessed huge inflows in the week ended June 4 as investor caution over a rise in U.S. tariffs on steel imports, uncertainties over President Donald Trump's trade disputes with China and a crucial employment report on Friday, boosted demand for safer investment avenues.

According to LSEG Lipper data, U.S. investors bought a net $66.24 billion worth of money market funds during the week, registering their largest weekly net purchase since December 4, 2024.

At the same time, riskier equity funds faced a net $7.42 billion worth of weekly outflows, sharply higher than approximately $5.39 billion worth of net disposals in the prior week.

The small-cap segment witnessed a net $2.99 billion worth of drawdowns, the highest for a week since April 30. Outflows from multi-cap, mid-cap and large-cap funds stood at $2.13 billion, $1.05 billion and $962 million, respectively.

Sectoral funds, meanwhile, experienced a minor $136 million worth of inflows with investors adding a net $1.15 billion into tech, and $309 million into consumer staples, while withdrawing nearly $1.16 billion from financials.

Weekly net inflows into U.S. bond funds, meanwhile, cooled to a four-week low of $4.8 billion during the week.

Despite the weaker demand in the broader segment, the short-to-intermediate investment-grade funds turned popular, grossing a net $3.98 billion- the highest since November 2024- worth of inflows during the week.

Inflation-protected funds and general domestic taxable fixed income funds also attracted a significant $634 million and $505 million, worth of inflows.

Source: Yahoo Finance

The OPEC+ producer group is expected to accelerate supply hikes later this year, possibly leading to a surplus in the fourth quarter that could place some downward pressure on oil prices, according to analysts at HSBC.

Since April, the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, has either made or announced output upticks totalling some 1.37 million barrels per day, or 62% of the 2.2 million of the total amount of supply it plans to put back into the market.

Strategists have suggested that these countries, which include producers like Saudi Arabia and Russia, are attempting to recapture some market share during a time of broader economic uncertainty stemming from global trade tensions and an ongoing transition to greener fuel sources.

At its May meeting, OPEC+ confirmed that it will raise its quota by 411,000 bpd for July, roughly equivalent to three monthly output increases and the same as May and June, the HSBC analysts said in a note to clients on Friday.

Meanwhile, recent data from the Energy Information Administration showed that global crude production is tipped to expand by 840,000 barrels per day this year and by 680,000 bpd in 2026.

Against this backdrop, the HSBC analysts led by Kim Fustier predicted that OPEC+ will pump up supply by 411,000 and 274,000 bpd in August and September, respectively -- a move the brokerage said would compress "five increases into two months".

Traditionally strong demand in the summer travel season is expected to absorb the impact of the OPEC+ output increases, the HSBC analysts said. But they flagged that the hikes "should tip the market into a bigger fourth quarter surplus than previously forecasted".

"Deteriorating fundamentals after summer raise downside risks to oil prices and our $65 per barrel assumption from fourth quarter onwards," the analysts added.

On Friday, oil prices were choppy as traders eyed concerns over slowing growth and weakening demand, but were still on track for the first positive week in three amid growing expectations that global supplies will be tighter than initially expected this year.

At 06:43 ET, Brent futures rose 0.1% to $65.41 a barrel, and U.S. West Texas Intermediate crude futures increased by 0.1% to $63.41 per barrel.

Source: Investing