Will US Inflation and RBI policy give direction to the market?

Will US inflation and RBI policy give direction to the market?

U.S. dollar weakens against its major counterparts, however, losses remained minor due to range-bound trade. As the market remained cautious ahead, the U.S. consumer prices report which is set to release later today, for indications on where the Federal Reserve’s monetary policy is headed.

Greenback came under pressure after data showed the Chinese economy slipped into deflation last month. This increased the likelihood of China implementing additional stimulus measures and pushed investors into risk assets.

The greenback was last down 0.10% against the major counterpart at 102.2940.

Energy prices rock yesterday, where Crude oil And Natural Gas tested this year high. The global Brent benchmark reached its highest level since January as a sharp fall in US fuel stocks and cuts in Saudi and Russian output countered concerns over slowing Chinese demand.

Natural gas futures hit seven-month highs of above $3 per mmBtu, or million metric British thermal units, on Wednesday as speculators chased up prices of America’s favourite fuel for indoor cooling and heating amid a reported slowdown in production from pipeline issues.

Bullion struggled for direction and after swinging in between gains, losses settled with minor losses.

MCX GOLD future settled at 58973, down 0.46%, and Silver future settled at 69972 down 0.35%. Crude oil jumped more than 1.30% and settled at 6929, prices made a high of 7009. Natural gas prices witnessed a 5.36% gain and settled at 243.70. Copper prices remained indecisive and settled at 732.2 up 0.39%.

Economic data and events scheduled today


At 10.00 am – RBI policy. Expect to hold the key rate unchanged at 6.50%. The reverse Repo rate at, the previous was 3.35%. CRR at 4.50%, unchanged. 

The above decision could have a neutral impact, but the forecast of Inflation and Growth will have a volatile impact on the market.


At 1.30 pm -ECB Economic Bulletin


Tentative (10th – 15th )

New Loans. The forecast is 790B and the previous was at 3050B.

M2 Money Supply y/y. The forecast is 11.0% previous was at 11.3%.

Above data could have a negative impact on the dollar.


At 6 pm –

CPI m/m. The forecast is 0.2%, unchanged from the previous 0.2%.

CPI y/y. The forecast is 3.3%, higher than the previous 3.0%.

Core CPI m/m. The forecast is 0.2%, unchanged from the previous 0.2%.

Unemployment Claims. Forecast is 231k from 227k

At 8.00 pm – Natural Gas Storage. The forecast is 24B from 14 B.

At 11.30 pm – Federal Budget Balance. The forecast is -107.5B from the previous -227.8B.

All the above data, especially inflation numbers will have a significant impact on the market.