Every Monday, Mint’s Plain Facts section features key data releases to keep an eye on during the week. The Reserve Bank of India (RBI) will hold its all-important monetary policy meeting this week, with domestic markets expecting the central bank to stick to its dovish stance. Data on business activity in India, US, China, and the euro area are also due this week. India’s largest mortgage lender HDFC Ltd will declare its June quarter earnings. Here are the big numbers to track:

1. RBI Policy Meet

A surge in headline inflation beyond RBI’s 6% limit in May led to murmurs that policymakers could consider a hawkish turn soon. But a steady print in June and the uneven pace of economic recovery have tamed the speculation for now. The next monetary policy meeting takes place this week, with a decision due on Friday.

Analysts largely expect RBI to look through elevated prices and not shift its accommodative stance yet. Dovish comments by the RBI governor have firmed up that view—he labels inflation as transitory and points out the need to support growth.

However, analysts expect the monetary policy committee (MPC) to raise its inflation projections for the coming quarters. The policy statement could also provide commentary on the impact of global food and commodity prices on domestic inflation and the possible transmission of wholesale inflation to the retail side. Markets will also watch out for remarks that drop a hint of how soon to expect a policy reversal.

2. India PMI

The purchasing managers’ index (PMI) slipped to an 11-month low in June as uncertainty kept business confidence muted despite the easing of lockdowns. As covid-19 cases subside, did corporate activity turn the corner in July?

The upcoming PMI print—due for manufacturing on Monday and for services on Wednesday—will provide the answers. Both sectors struggled with high input costs, job losses, and subdued order activity in June.

Exports declined, raw materials remained scarce, and consumer demand was weak. But hopes of revival have strengthened since then. High-frequency data show fast-rising mobility, recovering goods movement, and some easing in labour market stress—all of which could help activity pick up in July. Firms are also increasingly passing on costs to consumers and clients to boost profitability.

Nonetheless, any meaningful recovery in the coming months, especially in the laggard services firms, will hinge on the pace of covid-19 vaccinations.

3. HDFC Earnings

HDFC, the country’s largest mortgage financier, is scheduled to announce its June quarter results on Monday. Disruptions due to the pandemic have led to weaker collections and slower loan disbursements. However, for HDFC, strong demand in the individual segment aided loan disbursements, which rose 60% year-on-year in the March quarter.

While housing finance is better placed than others due to lower defaults, some impact of localized lockdowns will be felt in the June quarter. Analysts expect muted loan growth of below 3%, sequentially. Resumption in business and a fall in marginal cost of funds will cushion the margins in coming months, said analysts. Investors will keep a close eye on the management commentary around the impact of the second wave on asset quality.

4. US Trade

A continuing imports surge pushed the US’ trade deficit to $71.2 billion, the second widest on record, in May. Improved jobs numbers are likely to have bolstered this demand further in June. The monthly trade data, due on Thursday, will provide clues on the evolving consumption patterns at a time when the Delta variant is posing a threat to recovery.

The widening trade gap has of late become a proxy for how much quicker the US is coming out of the pandemic than the rest of the world. The government’s massive fiscal support has accelerated activity and pushed up pent-up demand, forcing businesses to import goods amidst raw material shortages. Exports are picking up slower as demand for US goods elsewhere is still recovering. Still, consumption has some distance to cover, and this could keep the trade deficit high for now. Economists expect the trend to reverse gradually as the pandemic dissipates and more economies start gathering steam.

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5. US, EU & China PMI

The composite PMI data for the US, euro area, and China will be released on Wednesday. All three are recovering healthily, riding on easing curbs and recovering business activity.

However, provisional data for the European Union (EU) and the US show divergent trajectories. In the US, the pace of recovery, though still rapid, appears to have peaked, while the EU gallops ahead, having lifted lockdowns much later. The early estimate shows the US PMI expansion at its slowest in four months, while for the EU, it could be the fastest in 21 years.

But fresh risks abound, risking the rate of growth. Businesses in all three economies are struggling with high input costs. High-frequency data from July show a slump in small business confidence in China, Bloomberg reported. In the US and Europe, the Delta variant and its uncertain response to vaccines threaten to undo some of the gains.

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