MUMBAI: Indian government bond yields are expected to be largely unchanged early on Friday, with the benchmark bond yield seen glued around key level, as investors await the start of federal bond auctions for the current financial year.
The benchmark 10-year bond yield is likely to move between 6.48% and 6.52% till the debt auction, a trader at a private bank said.
The benchmark yield ended at 6.4971% on Thursday.
“As of now the market is not very comfortable at going sharply below 6.50% mark for the 10-year note, and based on today’s demand at the debt auction, there could be strong directional move,” the trader said.
The 10-year bond yield fell to an over three-year low of 6.4553% early on Thursday but profit booking and caution ahead of a large debt sale led to reversal of those moves.
India bond yields seen easing after central bank doubles debt buy
New Delhi will sell bonds worth 360 billion rupees ($4.22 billion) later in the day.
The auction includes 300 billion rupees of the benchmark paper, which is the highest ever quantum for a single security, according to traders. Indian bond yields have not reacted much to the plunge in US Treasury yields after President Donald Trump announced larger-than-expected import tariffs.
The sweeping levies stoked recession fears, sending investors scurrying into safe-haven assets.
The 10-year US yield was around 4% in Asian hours, its lowest level in nearly six months, with the interest rate futures now pricing in almost 100 basis points of rate cuts by the Federal Reserve in 2025, up from around 60 bps a couple of days ago.
Meanwhile, the Reserve Bank of India’s policy decision is due next Wednesday, with another 25-basis-point rate cut already priced in. Citi expects the RBI to cut the rate by 75 bps this year.
Comments
Comments are closed for this article.