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Economic Weekly Wrap
24 February 2025 - 28 February 2025

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  • 24 Feb 2025

    Global flash manufacturing PMIs for Feb’25 indicate that activity slowed less than expected in Eurozone (47.3 versus est.: 47), particularly in Germany (46.1 versus 45.5) and France (45.5 versus 45.3). In Japan also pace of contraction eased a tad, while in the US, Feb’25 PMI (51.6) was better than estimated (51.4). However, services activity fell more than expected across Eurozone and US. In the US, weakening consumer sentiment (University of Michigan) to 64.7 from 67.8 in Jan’25, rise in 5-10yr inflation expectation, and lower existing home sales (4.08mn in Jan’25 versus est.: 4.13mn) dampened investor sentiments. In Germany, exit polls indicate highest seats for alliance of CDU/CSU parties. However coalition with a third party will be needed to reach majority. Removal of debt ceiling by the new government is expected to boost infrastructure spending.


    Global markets ended mixed. US indices closed in red amidst subdued macro data along with escalated concerns around tariff threats, and early signals of economic slowdown. Sensex tumbled given the persistent FII outflows and high profit booking. Sharp losses was noted in auto stocks. It is trading further weaker today, while other Asian stocks are trading mixed.

    Fig 1 – Stock markets

      20-02-2025 21-02-2025 Change, %
    Dow Jones 44,177 43,428 (1.7)
    S & P 500 6,118 6,013 (1.7)
    FTSE 8,663 8,659 0
    Nikkei 38,678 38,777 0.3
    Hang Seng 22,577 23,478 4.0
    Shanghai Comp 3,351 3,379 0.8
    Sensex 75,736 75,311 (0.6)
    Nifty 22,913 22,796 (0.5)

    Source: Bloomberg, Bank of Baroda Research


    Barring JPY, other global currencies depreciated. EUR weakened with investors turning their focus towards election results in Germany. JPY climbed up to a near 4-month high. INR ended up weaker. However, it is trading stronger today, while other Asian currencies are trading mixed.

    Fig 2 – Currencies

      20-02-2025 21-02-2025 Change, %
    EUR/USD (1 EUR / USD) 1.0501 1.0458 (0.4)
    GBP/USD (1 GBP / USD) 1.2669 1.2632 (0.3)
    USD/JPY (JPY / 1 USD) 149.6400 149.2700 0.2
    USD/INR (INR / 1 USD) 86.6663 86.7125 (0.1)
    USD/CNY (CNY / 1 USD) 7.2429 7.2523 (0.1)
    DXY Index 106.3720 106.6120 0.2

    Source: Bloomberg, Bank of Baroda Research

    Note: (-) indicates depreciation


    Barring China and India, other global yields fell. US 10Y yield was down by 7bps, tracking weak macro data points (Markit services PMI and consumer sentiment index). Yields in Europe were lower ahead of Germany’s election results. Exit polls show win for conservatives CDU/CSU party. India’s 10Y closed broadly unchanged, and is trading at similar level (6.70%) even today.

    Fig 3 – Bond 10Y yield

      20-02-2025 21-02-2025 Change, bps
    US 4.51 4.43 (7)
    UK 4.61 4.57 (4)
    Germany 2.53 2.47 (6)
    Japan 1.45 1.43 (2)
    China 1.72 1.76 4
    India 6.70 6.71 0

    Source: Bloomberg, Bank of Baroda Research


    Fig 4 – Short term rates

      20-02-2025 21-02-2025 Change, bps
    Tbill-91 days 6.40 6.40 0
    Tbill-182 days 6.54 6.51 (3)
    Tbill-364 days 6.55 6.54 (1)
    G-Sec 2Y 6.62 6.61 0
    India OIS-2M 6.50 6.49 (1)
    India OIS-9M 6.31 6.31 0
    SONIA int rate benchmark 4.45 4.45 0
    US SOFR 4.35 4.33 (2)

    Source: Bloomberg, Bank of Baroda Research


    Fig 5 – Liquidity

      20-02-2025 21-02-2025 Change (Rs tn)
    Net Liquidity (-deficit/+surplus) (1.9) (1.9) 0
    Reverse Repo 0 0 0
    Repo* 1.8 1.2 (0.6)

    Source: RBI, Bank of Baroda Research, *Includes LTRO


    Fig 6 – Capital market flows

      18-02-2025 20-02-2025 Change (US$ mn/Rs cr)
    FII (US$ mn) 713.8 (520.8) (1,234.5)
        Debt (230.9) (116.2) 114.7
        Equity 944.7 (404.6) (1,349.2)
    Mutual funds (Rs cr) 908.9 (1,502.0) (2,410.9)
        Debt (1,231.1) (4,662.0) (3,430.9)
        Equity 2,140.0 3,160.0 1,020.0

    Source: Bloomberg, Bank of Baroda Research

    Note: Mutual Fund data as of 13 Feb and 14 Feb 2025


    Oil prices fell, led by lower risks in Middle East and rising US crude stockpiles.

    Fig 7 – Commodities

      20-02-2025 21-02-2025 Change, %
    Brent crude (US$/bbl) 76.5 74.4 (2.7)
    Gold (US$/ Troy Ounce) 2939.0 2936.1 (0.1)
    Copper (US$/ MT) 9532.1 9518.8 (0.1)
    Zinc (US$/MT) 2883.0 2893.5 0.4
    Aluminium (US$/MT) 2727.5 2688.0 (1.4)

    Source: Bloomberg, Bank of Baroda Research

  • 25 Feb 2025

    National election results of Germany posted no major surprise. A coalition government led by CDU/CSU parties is set to be formed. All eyes are now on fiscal reforms that may be announced. The “debt break” rule allows fiscal deficit to slip to only 0.35% of GDP. This may see some changes in order to boost infrastructure spending. Businesses however remain sceptical as to how much the economic situation will improve in the near term. Germany’s IFO business climate index was broadly steady at 85.2 in Feb’25 from 85.1 in Jan’25, with current situation index declining (85 versus 86) and expectations index noting an improvement. In Asia, Japan’s PPI for Jan’25 inched up to 3.1% from 2.9% in Dec’24, indicating continued upward price pressures


    Global markets ended mixed. Investor confidence in the US economy turned shaky amidst subdued macro data, uncertainty on tariff war, and possibility of mass Federal government layoffs. Sensex continued to decline with IT and metal stocks taking the most beating. FPI continued to offload, adding to the pressure. However, it is trading higher today, other Asian stocks are trading lower.

    Fig 1 – Stock markets

      21-02-2025 24-02-2025 Change, %
    Dow Jones 43,428 43,461 0.1
    S & P 500 6,013 5,983 (0.5)
    FTSE 8,659 8,659 0
    Nikkei 38,777 38,777 0.3
    Hang Seng 23,478 23,342 (0.6)
    Shanghai Comp 3,379 3,373 (0.2)
    Sensex 75,311 74,454 (1.1)
    Nifty 22,796 22,553 (1.1)

    Source: Bloomberg, Bank of Baroda Research


    Global currencies ended mixed against the dollar. JPY weakened given the growing speculation of rate hike and another Yen carry trade unwind. INR ended flat. However, it is trading weaker today, while other Asian currencies are trading mixed.

    Fig 2 – Currencies

      21-02-2025 24-02-2025 Change, %
    EUR/USD (1 EUR / USD) 1.0458 1.0468 0.1
    GBP/USD (1 GBP / USD) 1.2632 1.2625 (0.1)
    USD/JPY (JPY / 1 USD) 149.2700 149.7200 (0.3)
    USD/INR (INR / 1 USD) 86.7125 86.7063 0
    USD/CNY (CNY / 1 USD) 7.2523 7.2463 0.1
    DXY Index 106.6120 106.5960 0

    Source: Bloomberg, Bank of Baroda Research

    Note: (-) indicates depreciation


    Global yields closed mixed. US 10Y yield was down by 3bps, as worries around US economic growth have resurfaced. Germany’s 10Y yield inched up a tad (1bps) tracking election results and following anticipation regarding fiscal reforms. India’s 10Y was unchanged at 6.70%, and is trading flat even today.

    Fig 3 – Bond 10Y yield

      21-02-2025 24-02-2025 Change, bps
    US 4.43 4.40 (3)
    UK 4.57 4.56 (1)
    Germany 2.47 2.48 1
    Japan 1.43 1.43 0
    China 1.76 1.80 4
    India 6.71 6.70 0

    Source: Bloomberg, Bank of Baroda Research


    Fig 4 – Short term rates

      21-02-2025 24-02-2025 Change, bps
    Tbill-91 days 6.40 6.34 (6)
    Tbill-182 days 6.51 6.53 2
    Tbill-364 days 6.54 6.52 (2)
    G-Sec 2Y 6.61 6.59 (2)
    India OIS-2M 6.49 6.48 (1)
    India OIS-9M 6.31 6.28 (3)
    SONIA int rate benchmark 4.45 4.45 0
    US SOFR 4.33 4.34 1

    Source: Bloomberg, Bank of Baroda Research


    Fig 5 – Liquidity

      21-02-2025 24-02-2025 Change (Rs tn)
    Net Liquidity (-deficit/+surplus) (1.9) (1.9) 0
    Reverse Repo 0 0 0
    Repo* 1.2 2.2 1.0

    Source: RBI, Bank of Baroda Research, *Includes LTRO


    Fig 6 – Capital market flows

      20-02-2025 21-02-2025 Change (US$ mn/Rs cr)
    FII (US$ mn) (520.8) (461.4) 59.4
        Debt (116.2) (65.4) 50.8
        Equity (404.6) (396.0) 8.6
    Mutual funds (Rs cr) 1,729.1 1,478.2 (250.9)
        Debt (51.4) (1,147.7) (1,096.3)
        Equity 1,780.5 2,626.0 845.5

    Source: Bloomberg, Bank of Baroda Research

    Note: Mutual Fund data as of 19 Feb and 20 Feb 2025


    Oil prices rose as US announces fresh sanctions on Iranian oil trade.

    Fig 7 – Commodities

      21-02-2025 24-02-2025 Change, %
    Brent crude (US$/bbl) 74.4 74.8 0.5
    Gold (US$/ Troy Ounce) 2936.1 2951.7 0.5
    Copper (US$/ MT) 9518.8 9489.5 (0.3)
    Zinc (US$/MT) 2893.5 2811.1 (2.8)
    Aluminium (US$/MT) 2688.0 2655.5 (1.2)

    Source: Bloomberg, Bank of Baroda Research

  • 27 Feb 2025

    US data shows that new home sales in Jan’25 fell by (-) 10.5% (MoM basis) to 657k units (est.: 675k) from 734k units in Dec’24. Elevated mortgage rates and seasonal factors (extreme cold weather) impacted sales. The 30Y fixed mortgage rate averaged 6.96% in Jan’25 versus 6.72% in Dec’24. Since then it has come down to 6.85% in Feb’25 so far but still remains ~80bps higher than Sep’24 level. Risks of stagflation have thus increased and investors expect Fed to lower rates by 50bps in H2CY25, despite build up in inflationary expectations (consumer sentiment indices and tax cut proposal). Further, with tariffs on Canada and Mexico set to kick in from next week, and remarks of US President on tariffs on EU, global growth concerns have again resurfaced. In India, to improve credit flow to NBFCs, RBI has restored the risk weights attached to SCBs lending to NBFCs to 100% from 125% earlier.


    Global indices ended mixed. Investors monitored comments by US President on tariffs. S&P 500 ended flat ahead of the corporate results from AI stocks. Hang Seng surged with gains in consumer and tech stocks, given the budget announcement of major allocation towards AI research. Sensex rebounded and is trading higher today in line with other Asian stocks.

    Fig 1 – Stock markets

      25-02-2025 26-02-2025 Change, %
    Dow Jones 43,621 43,433 (0.4)
    S & P 500 5,955 5,956 0
    FTSE 8,669 8,731 0.7
    Nikkei 38,238 38,142 (0.2)
    Hang Seng 23,034 23,788 3.3
    Shanghai Comp 3,346 3,380 1.0
    Sensex 74,454 74,602 0.2
    Nifty 22,553 22,548 0

    Source: Bloomberg, Bank of Baroda Research

    Note: Markets in India were closed on 26.02.2025


    Barring GBP (higher) and JPY (flat), other global currencies ended lower. DXY strengthened amidst news report of US$ 4.5tn tax cut proposal and ahead of the key PCE data. INR depreciated amidst persistent FII outflows. It is trading weaker today while other Asian currencies are trading mixed.

    Fig 2 – Currencies

      25-02-2025 26-02-2025 Change, %
    EUR/USD (1 EUR / USD) 1.0514 1.0485 (0.3)
    GBP/USD (1 GBP / USD) 1.2666 1.2676 0.1
    USD/JPY (JPY / 1 USD) 149.0300 149.1000 0
    USD/INR (INR / 1 USD) 86.7063 87.2025 (0.6)
    USD/CNY (CNY / 1 USD) 7.2510 7.2578 (0.1)
    DXY Index 106.3080 106.4160 0.1

    Source: Bloomberg, Bank of Baroda Research

    Note: (-) indicates depreciation; Markets in India were closed on 26.02.2025


    Global yields closed lower. US 10Y yield was down the most by 4bps, as investors expect Fed to lower rates in H2CY25 despite inflationary concerns. Germany’s 10Y yield also fell by 3bps over concerns of weak growth. Indian markets were closed, but have opened today a tad lower at 6.70%, tracking global cues and decline in oil prices

    Fig 3 – Bond 10Y yield

      25-02-2025 26-02-2025 Change, bps
    US 4.29 4.26 (3)
    UK 4.51 4.50 (1)
    Germany 2.46 2.43 (3)
    Japan 1.37 1.37 0
    China 1.78 1.77 (1)
    India 6.70 6.71 1

    Source: Bloomberg, Bank of Baroda Research

    Note: Markets in India were closed on 26.02.2025


    Fig 4 – Short term rates

      24-02-2025 25-02-2025 Change, bps
    Tbill-91 days 6.34 6.33 (1)
    Tbill-182 days 6.53 6.52 (1)
    Tbill-364 days 6.52 6.52 0
    G-Sec 2Y 6.59 6.57 (2)
    India OIS-2M 6.48 6.46 (2)
    India OIS-9M 6.28 6.27 (1)
    SONIA int rate benchmark 4.45 4.45 0
    US SOFR 4.34 4.33 (1)

    Source: Bloomberg, Bank of Baroda Research

    Note: Markets in India were closed on 26.02.2025


    Fig 5 – Liquidity

      24-02-2025 25-02-2025 Change (Rs tn)
    Net Liquidity (-deficit/+surplus) (1.9) (1.9) 0
    Reverse Repo 0 0 0
    Repo* 2.2 2.2 0

    Source: RBI, Bank of Baroda Research, *Includes LTRO

    Note: Markets in India were closed on 26.02.2025


    Fig 6 – Capital market flows

      21-02-2025 24-02-2025 Change (US$ mn/Rs cr)
    FII (US$ mn) (461.4) (533.1) (71.7)
        Debt (65.4) 126.6 192.0
        Equity (396.0) (659.7) (263.7)
    Mutual funds (Rs cr) 1,478.2 (1,944.0) (3,422.2)
        Debt (1,147.7) (4,422.2) (3,274.4)
        Equity 2,626.0 2,478.2 (147.8)

    Source: Bloomberg, Bank of Baroda Research

    Note: Mutual Fund data as of 20 Feb and 21 Feb 2025


    Oil prices fell as global growth outlook, led by US and Germany, weakens.

    Fig 7 – Commodities

      25-02-2025 26-02-2025 Change, %
    Brent crude (US$/bbl) 73.0 72.5 (0.7)
    Gold (US$/ Troy Ounce) 2915.0 2916.4 0
    Copper (US$/ MT) 9363.9 9448.3 0.9
    Zinc (US$/MT) 2771.8 2777.4 0.2
    Aluminium (US$/MT) 2638.5 2632.5 (0.2)

    Source: Bloomberg, Bank of Baroda Research

  • 28 Feb 2025

    Macro data from the US shows that growth held ground in Q4CY24 as second GDP estimate was left unrevised at 2.3%. In the latest quarter however, growth is varied across sectors. On one hand, durable goods orders noted a rebound in Jan’25 (3.1% versus 1.8% in Dec’24), while on the other hand, labour and real estate market appears to be slowing. Initial jobless claims for the week ending 22 Feb’25 rose by 22k from the previous week to reach 242k. Pending home sales in the US fell by (-) 4.6% in Jan’25 amidst elevated rates. As a result, stagflation concerns are reviving with GDP price index revised higher to 2.4% from 2.2% earlier. Possibility of a Fed rate cut in Jun’25 still remains unclear. Domestically, IMF has reaffirmed faith in India’s growth story, driven by its “financial sector health, strengthened corporate balance sheets and strong foundation in digital public infrastructure”.


    Global indices ended mixed as escalated concerns around ongoing threats of tariff wars weighed heavily on market sentiments. An additional fresh tariff of 10% will be further levied on China in the upcoming week, as per US President’s announcement. Sensex ended flat. However, it is trading lower today in line with other Asian indices.

    Fig 1 – Stock markets

      26-02-2025 27-02-2025 Change, %
    Dow Jones 43,433 43,240 (0.4)
    S & P 500 5,956 5,862 (1.6)
    FTSE 8,731 8,756 0.3
    Nikkei 38,142 38,256 0.3
    Hang Seng 23,788 23,718 (0.3)
    Shanghai Comp 3,380 3,388 0.2
    Sensex 74,602 74,612 0
    Nifty 22,548 22,545 0

    Source: Bloomberg, Bank of Baroda Research

    Note: Markets in India were closed on 26.02.2025


    Barring INR (flat), other global currencies ended lower. DXY advanced after US GDP expanded at an unchanged pace of 2.3% in Q4CY24. This comes ahead of the commentary by Fed officials and key PCE data. INR ended flat. It is trading weaker today while other Asian currencies are trading mixed.

    Fig 2 – Currencies

      26-02-2025 27-02-2025 Change, %
    EUR/USD (1 EUR / USD) 1.0485 1.0398 (0.8)
    GBP/USD (1 GBP / USD) 1.2676 1.2601 (0.6)
    USD/JPY (JPY / 1 USD) 149.1000 149.8100 (0.5)
    USD/INR (INR / 1 USD) 87.2025 87.1975 0
    USD/CNY (CNY / 1 USD) 7.2578 7.2865 (0.4)
    DXY Index 106.4160 107.2440 0.8

    Source: Bloomberg, Bank of Baroda Research

    Note: (-) indicates depreciation; Markets in India were closed on 26.02.2025


    Global yields closed mixed. US 10Y yield ended flat with increasing Fed dilemma, as growth shows signs of slowdown and prices inch higher. Germany’s 10Y yield fell by 2bps, ahead CDU-SPD coalition talks. India’s 10Y yield remained unchanged, tracking global cues. It is trading at similar levels today, despite increase in oil prices.

    Fig 3 – Bond 10Y yield

      26-02-2025 27-02-2025 Change, bps
    US 4.26 4.26 0
    UK 4.50 4.51 1
    Germany 2.43 2.41 (2)
    Japan 1.37 1.40 3
    China 1.77 1.80 3
    India 6.71 6.71 0

    Source: Bloomberg, Bank of Baroda Research

    Note: Markets in India were closed on 26.02.2025


    Fig 4 – Short term rates

      26-02-2025 27-02-2025 Change, bps
    Tbill-91 days 6.33 6.43 10
    Tbill-182 days 6.52 6.58 6
    Tbill-364 days 6.52 6.54 2
    G-Sec 2Y 6.57 6.57 0
    India OIS-2M 6.46 6.47 1
    India OIS-9M 6.27 6.27 0
    SONIA int rate benchmark 4.45 4.45 0
    US SOFR 4.33 4.33 0

    Source: Bloomberg, Bank of Baroda Research

    Note: Markets in India were closed on 26.02.2025


    Fig 5 – Liquidity

      25-02-2025 27-02-2025 Change (Rs tn)
    Net Liquidity (-deficit/+surplus) (1.9) (1.8) 0.1
    Reverse Repo 0 0 0
    Repo* 2.2 2.2 0

    Source: RBI, Bank of Baroda Research, *Includes LTRO| Note: Markets in India were closed on 26.02.2025


    Fig 6 – Capital market flows

      24-02-2025 25-02-2025 Change (US$ mn/Rs cr)
    FII (US$ mn) (533.1) (126.7) 406.4
        Debt 126.6 199.1 72.4
        Equity (659.7) (325.7) 334.0
    Mutual funds (Rs cr) (1,944.0) 2,286.9 4,230.9
        Debt (4,422.2) (3,395.6) 1,026.5
        Equity 2,478.2 5,682.6 3,204.4

    Source: Bloomberg, Bank of Baroda Research

    Note: Mutual Fund data as of 21 Feb and 24 Feb 2025


    Oil prices rose, tracking news around US tariffs and decline in US inventories.

    Fig 7 – Commodities

      26-02-2025 27-02-2025 Change, %
    Brent crude (US$/bbl) 72.5 74.0 2.1
    Gold (US$/ Troy Ounce) 2916.4 2877.5 (1.3)
    Copper (US$/ MT) 9448.3 9381.3 (0.7)
    Zinc (US$/MT) 2777.4 2777.8 0
    Aluminium (US$/MT) 2632.5 2632.5 0

    Source: Bloomberg, Bank of Baroda Research

Economics Scenario

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