Busy Data Docket

Market focus today will be on inflation data as well as the industrial production release, while the RBI will hold reverse repo operations and states will auction debt. Bonds dropped yesterday as oil continued to push higher which intensified worries around a large deficit, INR also came under pressure and dropped to the lowest level since August 2020. The announcement by the RBI that the GSAP programme would be discontinued continues to weigh, while bonds also suffered after reports that the government was considering additional bond sales to repay the debt of Air India. There were also reports yesterday that the government could consider increasing tax on some goods and services in order to simplify the tax structure, the two lowest rates could be raised by 1ppt each and eventually there would only be three applicable tax rates.