India debt/fx markets await inflation data

Mar 07 2014, 18:58 IST
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 Cash conditions will also be key, given advance tax outflows in mid-March. Reuters Cash conditions will also be key, given advance tax outflows in mid-March. Reuters
SummaryThe benchmark 10-year government bond is seen moving in a 8.75 to 8.90 percent range next week...

Indian foreign exchange and debt markets will await inflation data next week for direction as the RBI is set to review policy on April 1.

* Traders say CPI is broadly expected to be close to 9 percent, with any number significantly below that expected to spark a rally in debt and the rupee.

* Cash conditions will also be key, given advance tax outflows in mid-March, although traders do not expect OMO bond purchases by the RBI.

* The benchmark 10-year government bond is seen moving in a 8.75 to 8.90 percent range next week while the rupee is expected to hold in a 60.50 to 62.00 range, with strong resistance for the rupee expected at around 60.90 levels.

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