India: Will December CPI inflation overshoot 7%? – Standard Chartered

Sandeep Kanihama FXStreet Contributor

Standard Chartered analysts are expecting India’s CPI inflation in December to have risen to 6.9%, the highest since August 2014 (when it last hit the 7% mark), which is due to release on 13 January.

Key Quotes

“Rising food prices, led by vegetables, remain the key driver with food inflation likely jumping to double digits after six years. Weather disruptions have hurt vegetable supply (especially onions); this has contributed significantly to the recent increase in inflation.”

“For instance, while November headline CPI inflation was 5.5%, it was way lower at 3.5% excluding vegetables. Similarly, we expect CPI inflation excluding vegetables at 3.6% in December. Prices of other food sub-components like pulses, milk, egg, meat and fish and edible oils are also witnessing upward pressure.”

“Despite the spike in food inflation, we estimate that core inflation stayed flat at near record lows of 3.5% for a third consecutive month. However, the December print could exceed the psychological 7% mark if certain risks are realised.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Ethereum Price Forecast: BitMine extends ETH buying streak, says long-term outlook remains positive

Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.