MUMBAI: Indian government bond yields fell in early trading on Monday as investors took comfort from easing US peers, with focus turning to a weekly sale of state debt.
The 10-year benchmark bond yield was at 7.2415% as of 10:05 a.m. IST, after ending the previous session at 7.2575%.
“The 10-year US yield has fallen below 4.40% mark in Asian trade, so our yields have eased in tandem,” said a private bank trader.
“The benchmark yield will be protected in a 7.23%-7.26% band during the day.” Indian states aim to raise an aggregate of 116.20 billion rupees ($1.40 billion) through a sale bonds maturing in nine years to 25 years later in the day.
US Treasury yields headed lower on Monday after solid bidding in a 20-year bond sale. US yields have been easing on anticipation that the Federal Reserve will cut interest rates around June next year.
The 10-year US yield was at 4.3985% in Asian hours, while the two-year yield was at 4.9066%.
Meanwhile, oil prices rose on Monday as further supply cuts in OPEC+ production are expected to be announced following a meeting of member countries early next week.
Oil prices, however, came off on Tuesday as concerns over weaker demand amid a slowing global economy outweighed the prospect of deepening supply cuts.
The benchmark crude contract was at $81.92 per barrel. Easing oil prices help India, which is the third-largest importer of the commodity, to control inflation.
Retail inflation in the country eased to a four-month low of 4.87% in October, edging closer to the central bank’s 4% target.
Bond traders await a decision on the inclusion of Indian bonds on the Bloomberg Global Aggregate and the Emerging Market Local Currency indexes after JPMorgan added the bonds to its emerging market index in September.