Weekahead: Focus on econ data in countdown to RBI

Reuters Market Eye - India's bond and forex investors will await the factory output data on Tuesday and inflation on Thursday, which will be crucial indicators ahead of the RBI's policy review on March 19.

Industrial output is expected to have risen an annualised 1.2 percent in January, so any unexpected declines could bolster the bets on a rate cut this month, which would follow on the heels of RBI's 25 bps cut in January.

Traders expect inflation to have remained largely steady in February from January's 6.6 percent rise.

However, liquidity could tighten next week as companies are due to pay advance quarterly taxes by March 15.

The 10-year bond yield is expected to move in a 7.82 to 7.88 percent band until the factory data.

The rupee is expected to hold in a broad 54.25 to 55.40 range next week, although some traders predict a much tighter 54.00-54.40 range barring any significant surprises in the data.

KEY FACTORS/EVENTS TO WATCH

Mon: Feb trade data (This is tentative since India has no fixed date for its monthly trade data, but usually releases it between the 10th and 14th of each month)

Tues: January factory output data, Feb CPI (around 11 a.m.)

Thurs: Feb WPI (Around 12.00 p.m.) Fri: Weekly forex reserves data due (5.00 p.m)

(Reporting by Swati Bhat)