Prime Minister Narendra Modi is likely to triumph in India’s general elections and may even win an outright majority. Exit polls released Sunday night show his Bharatiya Janata Party-led National Democratic Alliance will win between 267 and 350 seats in India’s 543-seat parliament, likely well above the 272-seat majority mark. He will be returning to power at a time when the world’s fastest-growing major economy is facing a jobs crisis and a struggling rural sector. The focus now turns to whether Modi can kick-start consumer spending, alleviate farm distress and create employment opportunities, said Ajay Bodke, the chief executive officer of portfolio management services at Prabhudas Lilladher Pvt.
Australia’s Election ShockAustralia’s centre-right government is getting straight back to business after its surprise election victory, pledging to pass signature tax cuts to shore up a slowing economy. Just hours after Prime Minister Scott Morrison claimed the biggest come-from-behind win in decades, his Liberal-National coalition said it aimed to deliver tax relief for about half of Australia’s 25 million people when parliament reconvenes, perhaps as soon as next month. The Australian dollar jumped as much as 1%.
Market OpenAsian equity futures were narrowly mixed after U.S. stocks closed lower Friday, marking the second week of declines on the back of China trade pessimism. Treasury yields were little changed and oil fell Friday. The New Zealand and Australian dollars were higher Monday. Coming up this week, the FOMC releases minutes from its latest meeting and Federal Reserve Chairman Jerome Powell speaks at a financial markets gathering. The Reserve Bank of Australia publishes minutes from its latest meeting on Tuesday, the same day Governor Philip Lowe speaks, amid increasing anticipation of an interest-rate cut. The European Central Bank also publishes the account of its April meeting. There’s a slew of U.S. data, including home sales and manufacturing. Japan has GDP, trade and CPI.
More Headwinds for China’s Battered YuanChina’s yuan, already battered by the U.S. trade dispute, will soon have a catalyst for further depreciation. Offshore-listed Chinese companies will sell the yuan to buy foreign currencies and fund their $18.8 billion dividend bill due from June to August, according to Bloomberg calculations. While that’s less than last year’s $19.6 billion, the payments come at a sensitive time: the yuan is at its weakest this year and speculation is mounting it will fall to 7 per dollar, regarded as a key psychological level.
Trump’s Iran WarningPresident Donald Trump warned Iran not to threaten the U.S. or it will face ruinous consequences, as tensions mount between Washington and Tehran. The U.S. hastened the deployment of an aircraft carrier to the Persian Gulf and withdrew some diplomatic personnel from Iraq in recent weeks after saying intelligence showed a growing threat toward U.S. forces or commercial shipping by Iran or its proxy forces in the Mideast. Both sides said they are not looking for a confrontation.
This is what’s caught our eye over the last 24 hours.
Japan banks still struggle overseas. Stock winners and losers from Australia’s election. China says it has ample tools to deal with FX moves. Singapore dollar slipping amid the trade war. How much U.S. pork is going to China. U.K. Labour closer to backing second Brexit referendum. What’s next for HBO as “Game of Thrones” era ends.