Why it might not be India’s century

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23rd Jun 2023Subscribe nowIn a relatively quiet week for macro developments, I take the opportunity to lay out some longer-term thoughts on India. If you’re only interested in India, please feel free to skip past the first section, where I recap the week in global macro and EM.In today’s note:Summary and outlookMacro DataCentral banksIndia – caught in an AI and Climate Change pincer movement?Market monitorsShareSummary and OutlookHere in the UK, the Bank of England’s 50bp hike dominated news media output. The UK seems addicted to a good media misery-fest, as we seemingly do our best to enhance the narratives that lead to the coining of the term Great British Peso. The ‘pesification’ of the pound presumably played some role in the justification for Thursday’s hike. After many years trading EM FX, I know there’s nothing quite like positive carry to paper over the cracks of a bad domestic story. The BoE may already have gone too far, risking a severe recession here. There’s an increasing risk that other DM central banks could also slow their economies more than is necessary as they continue to feel politically vulnerable to high inflation and over-correct for their failure to predict war in Europe.Despite being one of the higher yielders, the USD has been soft within developed markets this month. Last week’s softer-than-expected inflation print coupled with a run of higher claims numbers support this weakness as does a sense of longer-run overvaluation. Running against this is the weakness elsewhere, the likely resumption of the Fed hiking cycle and the upcoming tightening of …