Market Weekahead: India debt/fx await inflation data for direction

Reuters Posted online: Friday, Jan 10, 2014 at 0000 hrs
* India's debt and foreign exchange markets are awaiting the retail and wholesale price inflation data due next week for cues on the likely outcome of the central bank's monetary policy review on Jan. 28.

* India's inflation rate will probably ease in December from stubbornly high levels, helped by waning food prices, a Reuters poll showed, providing some respite to the Reserve Bank of India struggling with cost pressures and slow growth.

* Data late on Friday showed industrial output unexpectedly fell an annual 2.1 percent in November, after contracting a revised 1.6 percent in October, the data showed.

* The partially convertible Indian rupee is expected to remain in a 61.50 to 62.50 range next week dealers say.

* The benchmark 10-year paper is seen in a range of 8.75 percent to 8.85 percent until the inflation data is released. * Traders will also tracking the impact from the U.S. jobs data due later in the day on the US dollar and global stock markets.

* Foreign fund flows into the domestic debt and stock markets will continue to remain crucial.

KEY FACTORS/EVENTS TO WATCH

Mon: Retail inflation data (1200 GMT)

Wed: Wholesale inflation data (0630 GMT)

Fri: Foreign exchange reserves data (1130 GMT)