MUMBAI: Indian federal bond yields were almost steady in early trade on Monday, with traders refraining from taking big positions as they expect the Reserve Bank of India to announce an open market operation for the week.
At 9:15 a.m. (0345 GMT), the 10-year benchmark bond yield was 8.17 percent from 8.16 percent on Friday. Traders expect it to trade in an 8.13 percent to 8.18 percent band during the session.
The RBI has bought about 807.2 billion rupees of bonds via open market operations since late November.
Cash squeeze in the banking system is expected to weigh on the market, traders said. On Friday, banks borrowed 1.13 trillion rupees from the RBI's repo auction under liquidity adjustment facility, sharply higher than the RBI's comfort zone of about 600 billion rupees deficit.
Strong risk appetite after surprisingly robust US jobs data is expected to weigh on bonds.
Global economies showed further evidence of resilience last month, with US job creation far exceeding expectations, while services sector activity accelerated surprisingly to its highest in nearly a year.
The euro zone's private-sector economy expanded in January for the first time since August, easing fears of a recession.
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