MUMBAI: Indian government bonds are expected to rise in early deals on Monday, buoyed by lower-than-expected weekly state debt supply later this week and a surge in US Treasuries.
The yield on the benchmark 10-year note is seen moving between 6.48% and 6.54%, a trader with a private bank said.
It closed at 6.5370% on Friday. Bond yields move inversely to prices.
Indian states are set to sell bonds worth 120 billion rupees ($1.35 billion) on Tuesday, which is lower than market expectations, traders said.
Also aiding sentiment is a drop in US Treasury yields on Friday to multi-week lows as investors moved to a safe haven following President Donald Trump’s threats to impose a “massive” increase in tariffs on Chinese imports.
Movement in US sovereign debt yields had been in a holding pattern in recent days as a government shutdown, now in its tenth day, has halted the production of crucial economic indicators.
Domestically, traders are hoping the 10-year yield will fall below the stubborn 6.49% level in intraday trade or at least sustain these levels at close.
“Bond yields will test lows, with the benchmark bond yield revisiting at least 6.49% if not lower.
The real test for the bulls would be a further break from that level,“ a trader with a private bank said.
Comments
Comments are closed for this article.