need2know: Five macro triggers that may move the market today

Today's monetary policy announcement is going to be crucial as it is likely to offer some guidance and clarity on the impact of the high-value currency note withdrawal on economic growth and inflation. Consumer price index-based inflation has consistently eased during this financial year, opening up more space for the central bank and the monetary policy committee (MPC) to favour a rate cut.

Here's a look at five macro triggers that may impact the market today


Ordinance route to cancel unreturned currency? The government may issue an ordinance to provide clear legal support for extinguishing the demonetised Rs 500 and Rs 1,000 notes that are not returned by December 30. The government wants to amend the Reserve Bank of India Act to this effect and ordinance route may be opted for as Parliament would not be in session immediately after the last day of surrender. An ordinance will pave the way for cancelling the said currency once the amount of money returned becomes clear on December 31.

Online card transactions up to Rs2,000 made easier: The Reserve Bank of India (RBI) has removed the so-called two-factor authentication for online card transactions involving sums up to Rs2,000, in a move aimed at simplifying and encouraging electronic payments. The move will likely help cab aggregators, online movie ticket sellers and even e-commerce marketplaces.

FinMin tightens norms to prepare outcome budget: In order to improve the quality of public expenditure, the finance ministry has tightened norms under which each ministry and department will have to prepare an Outcome Budget in consultation with Niti Aayog to achieve certain objectives within a timeframe. As per the ministry's directions, every ministry will have to prepare an outcome budget statement linking outlays against each scheme as well as project with the deliverables and medium term outcomes.

Kant moots merger of petrochem and oil ministry: The petrochemicals department should be merged with the Ministry of Petroleum & Natural Gas because they have synergies and can perform better together, Niti Aayog CEO Amitabh Kant said. The department is currently under the Ministry of Chemicals & Fertilizers. Most energy companies, government owned and private, have diversified into petrochemicals and are affected by the decisions of two ministries.

Wheat output may be hit if temperature rises: India's wheat production could be impacted this year if temperature rises in the crucial February-March as predicted by the Met Department, a top ICAR official said on Tuesday. He also said the Indian Council of Agricultural Research (ICAR) is hastening research on developing new wheat varieties to cope with high temperature due to climate change. But still, it will take a couple of years to reach farmers.

...and in financial markets yesterday

Rupee up: The rupee on Tuesday staged a strong recovery by gaining 31 paise to end at 67.90, its highest level in three weeks, on heavy dollar selling amid expectations of a rate cut by RBI on Wednesday

Bonds up: Government bonds (G-Secs) firmed up further following sustained demand from corporates and banks. The 7.59% 10-year benchmark bond maturing in 2026 advanced to Rs 108.6675 from Rs 108.5275, while its yield softened to 6.32% from 6.34%. The 7.61% government security maturing in 2030 climbed to Rs 110.42 from Rs 110.36, while its yield ruled steady to 6.44%. The 6.97% government security maturing in 2026 gained to Rs 105.55 from Rs 105.44, while its yield eased to 6.20% from 6.22%. The 7.59% government security maturing in 2029, the 7.68% government security maturing in 2023 and the 7.88% government security maturing in 2030 were also quoted higher to Rs 109.50, Rs 107.9625 and Rs 112.16 respectively.

Call rates up: The overnight call money rates finished higher at 6.35% from Monday's level 6.20%. It resumed steady at 6.20% and moved in a range of 6.35% and 6.00%.

Liquidity: The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 8462 crore in 19-bids at the overnight repo auction at a fixed rate of 6.25% on Tuesday morning, while it sold securities worth Rs 2219 crore in 19-bids at the overnight reverse repo auction at a fixed rate of 5.75% as on December 5.