Get prepared for a week of heavy data flows
The current week is likely to see a slew of data flows staring from Tuesday and going all the way to Friday. Here are the key data flows to watch out for and here is what to expect from each of these parameters.
1) The first big trigger in the coming week will be the results. Some of the major large cap results that are expected in the coming week include; HCL Technologies, HDFC Bank, ACC, Mindtree, L&T Infotech, ICICI Prudential Life and Tata Elxsi. Some mid-cap numbers this week are LTTS, Spandana Sphoorthy, Delta, Angel One, Butterfly, Bharat Electronics.
2) India inflation will be the big data to watch out for and we are referring here to both inflation numbers. CPI inflation will be announced on Tuesday and it is expected to taper further from the 7.04% levels due to lower commodity prices. However, WPI inflation was 15.8% last month and that would still be under stress and keep the RBI hawkish.
3) The index of industrial production (IIP), figure for May will also be out on Tuesday, and the IIP normally comes with a lag of one month. This month again it is likely to gain from the base effect after IIP grew at 7.1% for April 2022. However, this will not impact the RBI policy as the focus for now remains on the inflation number.
4) A big data point will be the US Consumer inflation on Wednesday. OF course, the US Fed still uses the PCE inflation for its rate decision, but the US consumer inflation is a key factor in the rate stance. US inflation was at a 40-year high of 8.6% in May and is expected to have only tapered marginally in June. Fed looks set to hike by 75 bps in July.
5) There are 3 related high frequency data points that will be observed this week. Brent Crude prices are expected to break out of the range of $100-$110 per barrel, although the supply disruptions in Norway and Libya could be an overhang. With FPI selling still elevated, the Rupee looks all set to get closer to the 80/$ mark in the current week.
6) Two important data points this week will be the weekly forex reserves data and the trade data for June to be released on Friday 15th July. Trade deficit is expected to touch a record of nearly $26 billion this month with negative implications for the current account deficit (CAD). The forex reserves are already down from a high of $647 billion to $588 billion and the rupee defending pressure is likely to pull down reserves further.
7) Finally, here are some major global data points expected this week. There is the key data flows from the US markets this week include Inflation including API oil stocks, PPI, jobless claims, EIA natural gas stocks, Retail sales, IIP, Business inventories. Among other key markets in the rest of the world the focus shifts to data points like the European Union IIP; Japan Machinery orders, IIP, PPI; China Q2 GDP, IIP, Retail Sales and the Unemployment Rate.
All in all, it is likely to be a data heavy week for the stock markets and inflation would be, perhaps the most important data point to look out for.
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