Headlines
Six wires — CPI re-acceleration and crude logistics dominate.
Food's Share of Spending Rises as Income Falls
An IMF chart, built on USDA data, plots food spending as a share of GDP against food's share of total consumer spending. Poorer economies sit further up and further right on both scales.
- ▸Advanced economies hold the bottom-left corner. Food takes roughly 5 to 22 percent of consumer spending in that group, on food outlays worth under about 13 percent of GDP.
- ▸Emerging markets spread across the whole middle of the chart. Their markers run from about 11 percent of consumer spending to above 40 percent, and the group overlaps the advanced cluster at one end and the low-income band at the other.
- ▸Low-income developing countries occupy the top-right. Every marker in that group sits above roughly 29 percent of consumer spending, and the highest of them approach 55 percent.
A household that already spends half its money on food has no cheaper category to move into, so a price rise comes out of everything else it buys. The IMF places Bangladesh in the low-income group at the upper right of this chart. Food and beverages carry the largest single weight in the Bangladesh CPI basket, which is the same fact seen from the other side.
Food inflation belongs in the credit process, not only in the macro commentary. A price move reaches disposable income before it reaches any borrower's file, and the thinnest-buffer books — retail, microfinance-linked exposure, small-ticket SME — feel it first. A risk team reading food prices only off the monthly CPI print is working from the slowest signal available.
Policy & Rates (Bangladesh Bank)
On hold since April MPC; 9.04% CPI rules out any near-term cut.
WATCH
- ◆June MPC — 9.04% CPI eliminates any cut scenario
- ◆Weekly reserves print to confirm $108 Brent pass-through
RISK
- ▼CPI re-acceleration above 9.5% forces hike discussion
- ▼Reserves breach $33B if oil re-spikes before June MPC
Banking
Q4 prints unchanged; 9.04% April CPI forecloses rate relief.
WATCH
- ◆Q1 2026 BB disclosure — NPL deterioration at this CAR triggers PCA
- ◆FY26 budget recap allocation — 9.04% CPI limits fiscal headroom
RISK
- ▼Forced merger without fiscal backstop creates counterparty cascade
- ▼Shariah depositor confidence shock adds social risk to balance-sheet stress
The Q4 2025 prints — NPL 35.73%, CAR 1.56% — remain the balance-sheet anchor for this credit cycle, unchanged because the BDT 1.4tn provisioning gap dwarfs any available remedy. Today's April CPI at 9.04% — back above 9% for the first time in eight months — forecloses the one scenario that might have eased pressure: a policy rate cut. With the corridor at 8.50–11.50% and inflation re-accelerating on Iran oil pass-through, BB has no room to ease, and banks below Basel III's 10.5% CAR floor have no room to lend. Shariah-based depositors protesting BB remarks today signal that social pressure is building alongside balance-sheet stress. Q1 2026 disclosure is the tripwire — any deterioration from 35.73% at this CAR triggers automatic PCA.
FX & External
Peg steady; first crude tanker eases logistics risk on Hormuz route.
WATCH
- ◆Buy-sell spread widening past 0.50 BDT
- ◆Weekly reserves print — $108 Brent reduces drawdown pace
RISK
- ▼Oil re-spike above $115 erases tanker-arrival relief
- ▼9.04% CPI pressures BB to defend corridor — limits FX flexibility
DSE Markets
Red session continues; CPI re-acceleration adds fresh macro headwind.
WATCH
- ◆DSEX breach below 5,220 on turnover above 1,000cr
- ◆Floor price decision on trapped large-caps
RISK
- ▼Bank-sector Q1 earnings repricing collateral values
- ▼9.04% CPI reprices rate-sensitive equity sectors
T-Bonds & T-Bills
Curve digesting Monday repricing; 9.04% CPI anchors higher-for-longer thesis.
WATCH
- ◆Next 5Y auction — 9.04% CPI may drive bids above 10.75%
- ◆91d breach above 10.50% — front-end contagion signal
RISK
- ▼Duration P&L hit on legacy 5Y positions entered at 10.23%
- ▼FY26 fiscal supply calendar may push 10Y above 11%
Macro & Inflation
CPI re-accelerates to 9.04% in April; oil pass-through drives non-food spike.
WATCH
- ◆May CPI print — whether 9%+ is transient or embedded
- ◆DAM wholesale food prices for leading indicator
RISK
- ▼CPI re-acceleration above 9.5% forces BB hike discussion
- ▼Negative deposit real rates erode time-deposit confidence
April CPI at 9.04% — up 44bp from March's 8.60% — breaks back above 9% for the first time in eight months, driven by Iran war-related oil and energy cost pass-through. Food CPI held flat at 8.24%, meaning the entire acceleration is non-food: fuel, transport, utilities. This shifts the monetary policy calculus — any residual market pricing for a June MPC cut is dead. The SDF floor at 8.50% now sits below headline inflation, implying the stance is functionally neutral despite the headline repo at 10.00%. For the banking sector, 9.04% CPI means deposit rates must rise to retain time-deposit confidence, compressing NIMs at a moment when NPL provisioning already consumes all available capital.
Iran War & Oil
Brent at $108; first crude tanker reaches Ctg since Hormuz conflict.
WATCH
- ◆Second weekly close below $110 — confirms durable de-escalation
- ◆Tanker insurance rate normalisation — Lloyd's weekly
RISK
- ▼Peace signals reverse — Hormuz re-escalation re-prices to $120+
- ▼April CPI at 9.04% shows price-chain damage already embedded
Brent holds at $108 — yesterday's $6 retreat from $114 on peace diplomacy was the largest single-session drop since the April Hormuz incident. The first crude oil tanker to reach Chittagong since the conflict signals partial logistics normalisation; Cape-routing had added 12–15 days and $3–5/bbl to BD-delivered crude costs. However, April CPI at 9.04% confirms the price-chain damage is already embedded — Brent off its peak has not prevented energy cost pass-through from re-accelerating inflation above 9%. The structural risk premium persists; tanker insurance remains elevated and OPEC+ has made no supply commitment. LC desks can selectively ease the 60-day tenor cap back toward 75 days for IG counterparties, but 115% cash margin on fuel imports above $5M remains prudent until a second weekly close below $110 confirms durable de-escalation.
Every morning.
Free.