Research preview

India’s wholesale price index rose to 11.39 % in September, the highest level in four years. Such a jump signals rising input costs for manufacturers and can quickly filter through to retail prices, exchange rates, and asset returns. For systematic traders, the event creates both risks and opportunities that can be quantified and incorporated into models. Inflation as a Macro Signal for Factor Models Factor models often include a macro‑inflation component to capture the impact of price level changes on equities, commodities, and currencies. A sudden increase in wholesale inflation suggests that producers will face higher cost pressures, which can compress profit margins for firms with limited pricing power....