MUMBAI: Indian government bond yields are expected to be little changed in early deals on Tuesday as traders await fresh supply later in the session followed by key inflation prints a day later.
The benchmark 10-year yield is likely to move between 6.68% and 6.72%, a trader with a private bank said, compared with its previous close of 6.7024%.
“There is no major positive trigger that could induce any rally today, but at the same time the upside in the benchmark bond yield should remain capped at around 6.72%, even if demand for state debt is weak,” the trader said.
Indian states are set to raise 495.22 billion rupees ($5.7 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 amid weak demand in the last month of the financial year that ends on March 31.
The central bank aims to purchase debt worth 500 billion rupees on Wednesday and this will be followed by a similar-sized bond purchase on March 18.
Meanwhile, India’s retail inflation data for February is due on Wednesday.
India bonds to react to debt supply, bond purchase, inflation data
A Reuters poll pegs the reading at 3.98%, down from 4.31% in January.
This would be the first time in six months that the reading would ease below the central bank target of 4%. US retail inflation is also set to be released on the same day.
US bond yields eased on Monday amid increasing demand for safe-haven assets after President Donald Trump declined to rule out a recession as a result of his tariff policies.
Interest rate futures are pricing around 86 basis points of Fed rate cuts in 2025.
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