* India's forex markets will largely track euro zone developments and the negotiations over the U.S. fiscal cliff in the absence of any major domestic data.
* The winter session on parliament will begin Thursday and will be closely watched by investors to see whether the government can pass key reforms such as foreign direct investment in pension and insurance, as well as the banking amendment bill.
* The government's will to pass reforms is seen as critical at a time when the economy is likely to grow at its slowest in nearly a decade, while the country is seen struggling to contain the fiscal deficit at 5.3 percent of gross domestic product.
* Opposition parties are also seen likely to try to challenge the government's measure to open up multi-brand retail to foreign investment, although the action does not need parliament approval.
* Indian bond markets are also checking whether the RBI will announce bond purchases via open market operations, which traders say could send bond yields down 3-5 bps, if announced.
KEY FACTORS/EVENTS TO WATCH
Mon: Two day RBI-Asian Development Bank conference begins on managing capital flows
Tues: India to auction FII debt limits
Fri: Bank credit and forex reserves data.