MUMBAI: Indian government bond yields were barely changed at the start of a week that would see key events including heavy debt supply, bond purchases from the central bank and inflation data due in India as well as the United States.
The benchmark 10-year yield was at 6.6902% as of 9:45 a.m. IST, compared with its previous close of 6.6881%.
“We could see some pressure on bonds, especially the benchmark yield, which will react to multiple factors that are not so favourable,” trader with a private bank said.
Indian states are set to raise 495.22 billion rupees ($5.68 billion) through the sale of bonds, nearly 110 billion rupees higher than the pre-announced calendar.
Last week, they raised over 100 billion rupees more than scheduled.
The supply comes as many traders have chosen to remain on the sidelines in the last month of the financial year.
Still, the rise in yields remains capped as the Reserve Bank of India will buy bonds worth 500 billion rupees on Wednesday; banks would be keen to offer their securities to free up some space in their treasury portfolios.
India bond yields seen little changed as traders search for fresh triggers
This will be followed by a similar size bond purchase on March 18 and a $10 billion fx swap on March 24.
Meanwhile, US yields rose on Friday after Federal Reserve Chair Jerome Powell said the US central bank not need be in a hurry to cut rates and that it remains to be seen whether President Donald Trump administration’s tariff plans will prove to be inflationary.
Interest rate futures are pricing around 75 basis points of rate cuts from the Fed in 2025.
It reduced rates by 100 bps in 2024.
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