Inflation Data

CPI Inflation estimates 

India will release the Dec inflation number on 12th Jan and the market consensus is for a reading of 5.88%. My own estimates are for the Dec print at 5.91%. The next quarter trajectory is seen at an average of 5.52% with 5.93% (Jan), 5.69% (Feb) and 4.92% (Mar). While the headline print will be important, the core component will be even more crucial which has been holding at 6% since the last quarter. The decline in the Nov print to 5.84% was largely driven by food disinflation. Milk and cereal prices which account for 16.28% of the basket have seen an increase in December while vegetable prices have seen disinflation. Refer to the summary Daily items. 

The economist estimates range from 5.70% - 6.10%. A print closer to 5.50% alters the future trajectory of inflation and interest rates likewise.

US Headline inflation is expected to rise 6.5% yoy, flat mom. US inflation appears to have peaked in the month of June 9.10% and is seen steadily declining. Please refer to the earlier article Nov Inflation. Goods disinflation is a firmly entrenched view but the services component will be the key.