Last week, inflation in the US stood at 0.4% month-on-month basis and 3.2% year-on-year (YoY), slightly surpassing the estimated 0.3% (MoM). On Thursday, the Purchase Price Index data came out at 0.6% MoM in February, doubling the analyst’s expectation of 0.3% and marking its highest reading since August '23. This raised concerns about the possibility of the Federal Reserve maintaining interest rates in its upcoming June decision.

Looking ahead to this week, the Federal Reserve's rate decision is scheduled for Wednesday. It's highly improbable that there will be any rate cuts this week, given the ongoing battle against inflation is not concluded. Additionally, the Federal Open Market Committee (FOMC) projections and the Fed conference are dated for Wednesday and Thursday (13th and 14th), respectively. I am expecting the Feds to provide clarity on their stance following the mixed signals from last week's inflation and PPI data.

In India, inflation for February was at 0.2% MoM and 5.09% YoY, with Wholesale Price Index (WPI) inflation at 0.2% YoY. The week ahead will feature M3 Money Supply, Bank Loan rates, Deposit rates, and Forex reserves held by the Reserve Bank of India (RBI). While these events are unlikely to cause sudden market shifts or reversals, they do provide insights into the country's economic trajectory.

Further, Indian Indices are facing pressure since SEBI has raised concerns about the mid and small cap which is appears to be overheated and a bubble after the recent run ups.

Date : 17th Mar '24; Source - Trading Economics, Reuters

LR