FxWirePro: Daily Commodity Tracker - 21st March, 2022 
The Indian sovereign bonds strengthened Wednesday after recent data showed that the country’s inflation fell in November, reviving hopes for a rate cut from the Reserve Bank of India (RBI) in 2017.
The yield on the benchmark 10-year bonds, which moves inversely to its price, fell 1 basis point to 6.41 percent and the yield on short-term 2-year note also dipped 1 basis point to 6.23 percent by 07:10 GMT.
India’s wholesale price inflation fell during the month of November, at the slowest pace in five months. However, it came in higher than what market participants had priced in initially.
India's wholesale prices rose 3.15 percent year-on-year in November, its slowest pace in five months, data released by the Indian Ministry of Commerce and Industry showed Wednesday. The data compared with a 3.10 percent annual rise forecast by economists in a Reuters poll.
On Tuesday, India’s consumer price inflation slowed to 3.63 percent y/y in November, from 4.20 percent in October. This comes lower than the market consensus of 3.90 percent y/y. The downward surprise was mainly because of fruits and vegetables.
Markets will remain focused on the Federal Reserve last monetary policy decision for 2016, which is scheduled to be released on December 14. The Federal Reserve is expected to increase the target range of the key interest rate by 25 basis points to 0.50-0.75 percent, with a unanimous decision. Little change to the statement, though the Committee is likely to acknowledge that market-based measures of inflation compensation have risen further.
Last week, the Reserve Bank of India (RBI) kept the benchmark repo rate unchanged at the two-day bi-monthly policy decision based on an overall assessment of the macroeconomic conditions, with an objective of achieving stable consumer price inflation.
The RBI’s Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 percent. Consequently, the reverse repo rate under the LAF remains unchanged at 5.75 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
The decision of the MPC remains consistent with the objective of achieving consumer price index (CPI) inflation at 5 percent by Q4 of 2016-17, while maintaining a medium-term target of 4 percent within a band of +/- 2 percent, while supporting growth.
Meanwhile, the benchmark 30-share Sensex is down 0.32 percent to 26,611, while 50-share Nifty slid 0.09 percent to 8,214 at 7:30 GMT.
