CPI & Industrial Production Data Awaited

Markets await inflation and industrial production data today. CPI is expected to have slowed last month as the effects of a surge in virus cases took hold, while industrial production is expected to surge due to a low base effect.

• Goldman Sachs on the releases:
• "We expect CPI inflation in April to fall to 4.1% yoy (Bloomberg consensus: 4.1% yoy, March: 5.5% yoy), within the RBI target band of 2%-6%. Sequentially, food prices have fallen by about 2.0% in April on a month-on-month basis, which along with favorable base effects implies material decline in food inflation this month. Core inflation (headline excluding food, fuel and transport and communication inflation) could also fall to 4.2% yoy in April (from 4.7% yoy in March) driven by favorable base effects."
• "We expect IP growth to surge to 17.5% yoy in March (Bloomberg consensus: 19.2% yoy, February: -3.6% yoy) driven entirely by base effects, as a large sequential drop in March last year falls out of the year-over-year calculation. We expect IP to have contracted 3.3% mom sa in March driven by a contraction in the core industrial index and a fall in PMI manufacturing to 55.4 in March from 57.5 in February."