J.P. Morgan See RBI Firmly On Hold In June Post Friday's April CPI Data

J.P. Morgan expect the authorities will breathe a sigh of relief post Friday's inflation print:

• "India’s April CPI expectedly gapped down to 4.7% oya (J.P. Morgan and Consensus: 4.8%) from 5.7% in March, helped both by favourable base effects (recall April 2022 CPI surged to a cycle high of 7.8%) and declining sequential momentum."
• "More importantly, core-core monthly momentum softened further to 0.26% (m/m, sa) in April from 0.35% in March and 0.42% in March. Consequently, year-on-year core-core inflation softened to 5.7% oya in April from 6% in March. The sequential increase in core-core prices in April was the lowest since mid-2021, and the recent trajectory is likely to induce a sigh of relief from the MPC. Softer than expected food prices and softening core-momentum together create meaningful downside risks to the RBI’s CPI inflation forecast (5.1%) for this quarter and can be expected to keep the RBI firmly on hold at the June review."