The magic number is $10 billion. The Indian bond market expects that the government will have to borrow $10 billion more than expected in the next fiscal year. Indian bond yields are at 7%.
The budget announcement is Monday. His shortness, the Finance Minister, will speak for an hour or two, but only one phrase matters to Indian financial markets, $10 billion. A bigger number, bond yields to the moon and equities to the basement. A smaller number and the next financial leg to nirvana begins.
Global markets are not conducive. Oil and commodities are turning lower after the run in the first half of 2009, taking the commodity linked countries, Australia and Cnanda, with them. US markets are creaking with an esoteric indicator, the directional index, forecasting lower prices.
Monday. $10 billion. Turn Flop River.
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