MUMBAI: Indian government bond yields were little changed on Wednesday, with volumes falling sharply, as most traders stayed on the sidelines awaiting fresh triggers in the new year.

The 10-year benchmark bond yield was at 7.1852% as of 10:00 a.m. IST, after closing at 7.1819% in the previous session. “With benchmark bond yield stuck around par levels, there is little interest in terms of trading or even investment,” a trader with a private bank said.

Indian government bond market trading volume slumped to its lowest level in two months on Tuesday, and is expected to be low through Thursday, as prevailing benchmark levels do little to entice traders.

Market participants await details of Indian states’ borrowing in the last quarter of the fiscal year.

States raised 2.47 trillion rupees ($29.68 billion) in October-December, exceeding their planned borrowing for the first time in 13 quarters.

On the global front, traders eye further moves in US Treasuries, after the 10-year yield dropped 70 basis points in the current quarter, falling over 115 basis points from its 16-year high in October.

The US 10-year bond yield was at 3.88% in Asian hours, as traders bet on an aggressive rate easing from the Federal Reserve in 2024.

Lack of cues, volume leads to flattish India bonds in last week of 2023

Markets are pricing in an 82% probability of a Fed rate cut in March, and see a total of 150 basis points of rate cuts in 2024.

The Fed, at its monetary policy meeting earlier in the month, had hinted at 75-basis-points rate cuts in 2024.

Meanwhile, India’s monetary policy committee (MPC) will remain vigilant of inflation risks, with the overall policy outlook remaining clouded by volatile and uncertain food prices, the minutes of the December policy showed Friday.