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Japan Maritime Self-Defense Forces diesel-electric submarine Soryu. (File)

New Delhi is considering a project to build six Japanese Soryu-class diesel-electric submarines in an Indian shipyard, according to Indian media resources.  

 “In keeping with their expanding strategic partnership, the Modi government has asked the Shinzo Abe administration whether it would be interested in the over Rs 50,000 crore [$8.1 billion] project to build six stealth submarines in India,”

It should be noted that in 2007, India had launched Project 75I, which was aimed at replacing its aging fleet with new foreign vessels. After repeated delays, the plan eventually obtained its second wind under the new Prime Minister, Narendra Modi. It is expected, that the six diesel-electric submarines will be built in India, in compliance with the popular “Make in India” initiative.

The Modi Cabinet, which plans to put the project out to tender, has reportedly forwarded a proposal to Japan to “consider the possibility” of building its Soryu-class submarines in India on condition that Japan “will form a joint venture with an Indian shipyard,” the Diplomat points out. >> Read More


“…but it can’t go any lower, right?” On the heels of yesterday’s German deflation and today’s near-record EU wide deflation prints… and the ongoing tumble in inflation expectations post-Q€ – the rush for the safety of Bunds continues (and with it the arb-drag on US yields) as for the first time ever, 30Y German Bunds yield below 1%… 

  • Prior +0.7% q/q

The employment cost index is part of the Q4 GDP report but the Fed is focused on wage inflation at the moment so this sub-index is particularly important.

If you annualize this report, wage growth is at 2.4% on the heels of some very good quarters. That doesn’t scream ‘inflation’ but it doesn’t scream for ZIRP either.

  • Prior 5.0%
  • Core PCE prices 1.1% vs 1.2% exp. Prior 1.4%
  • PCE -0.5% vs 0.8% exp. Prior 1.2%
  • Personal consumption 4.3% vs 4.0% exp. Prior 3.2%
  • Sales advance 1.8% vs 3.3% exp. Prior 5.0%
  • GDP deflator -0.15 vs 1.0% exp . Prior 1.4%

Russian President Vladimir Putin on Friday held an operative meeting with the country’s Security Council on the deterioration of the situation in southeastern Ukraine, Kremlin spokesman Dmitry Peskov said.

 “There was a broad exchange of opinions expressed on the worsening conditions that are continuing in southeastern Ukraine,” Peskov said.

The military confrontation between Kiev forces and independence supporters in eastern Ukraine began in April 2014 recently intensified despite a ceasefire agreement reached in September.

In January, local militia said that Ukrainian forces began shelling residential areas in the Donetsk Region. >> Read More


Eurostat has had to revise its initial flash reading for the eurozone’s core inflation rate in January after a data mishap.

Rather than the initial drop to 0.5 per cent, the European stats body now says the core rate – which excludes choppy components like energy – fell to 0.6 per cent. Economists had expected it to stay at 0.7 per cent.

Often such a small revision would not matter greatly, but with the headline rate falling unexpectedly steeply to minus 0.6 per cent mostly because of the oil rout, many analysts are paying extra attention to the core rate as a better gauge of price pressures in the eurozone economy.

In a press release Eurostat said: >> Read More


India revised up its economic growth to 6.9 percent from 4.7 percent in the fiscal year to March 2014 on Friday after the government changed the formula to measure the economy, a move that will make it easier for the government to meet fiscal deficit goals.

The new measurement of gross domestic product (GDP) includes under-represented and informal economic sectors as well as items such as smart phones and LED television sets.

The government also revised its GDP for 2012/13 to 5.1 percent from 4.5 percent earlier.

New Delhi revises the method of calculating national accounts and other macro data every five years, bringing in a newer base year and adjusting for changes in the economy.

It will now use 2011/12 as the new base year, instead of 2004/05.

The Centre will have to keep its revenues above expenditure in the last quarter of the current financial year to rein in itsfiscal deficit at 4.1 per cent of Gross Domestic Product (GDP) as the deficit has crossed the Budget Estimates (BE) in the first nine months itself. 

The fiscal deficit remained high despite softening oil  prices which enabled the government to raise excise duty twice  (till December) and reduce subsidies of the oil marketing companies as revenues  from other streams–taxes, disinvestment and spectrum—were not forthcoming.

The fiscal deficit data was released by the Controller General of Accounts (CGA) on Friday when another news of government collecting more than Rs 22,000 crore from disinvestment in Coal India Ltd came. 
The official data showed the deficit stood at Rs 5.32 lakh crore during April-December of 2014-15, surpassing a full-year’s BE of Rs 5.31 lakh-crore by 0.2 per cent . For the corresponding period last year, the deficit was 93.9 per cent of the full-year BE. 
If revenues are not forthcoming, it is inevitable that Finance Minister Arun Jaitley will in the year’s final quarter (January-March) have to enforce massive spending cuts.
For the first nine months of 2014-15,  tax revenue of the Centre has been Rs 5.45 lakh-crore, about 55.8 per cent of the full-year BE of Rs 9.77 lakh-crore. For April-December last year, it was higher at 58.6 per cent of the full-year target. This is despite the government collecting more from two excise duty hikes on petrol and diesel in November and December. 

>> Read More



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Technically Yours,
Team ASR,
Baroda, India.