India will release the CPI data due today.
Quick Observations
Month on month change in price of major pulses was mixed with Gram dal, Urad dal and Masoor dal seeing a decline in prices while Arhar Dal and Moong dal seeing a mom rise of 0.40% to 0.60%. Edible oils witnessed a broad deceleration with only groundnut oil and palm oil increasing . But the sharp fall in prices of mustard oil (3%) and sunflower oil (2.75%) should see mom declines in prices of oil and fats which contributes to 3.56% of the CPI weight. Prices of cereals declined lead by fall in wheat prices of over 3%. Prices of potato and onion fell sharply declining over 8% while tomato prices declined over 2%.
My estimates call for a reading between 6.00% - 6.15% while the market estimates are at 6.35% . A reading towards 6.00% will substantially alter the future inflation trajectory and could lead to material repricing of interest rate expectations.
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