MUMBAI: Indian government bonds little changed on Wednesday in the absence of any fresh domestic triggers and shrugging off a decline in U.S. Treasury bonds.
The yield on the benchmark 10-year bond was at 6.3090% as of 10:05 a.m. IST after closing at 6.3090% on Tuesday. The five-year 6.75% 2029 bond yield was steady at 5.9875%, compared with Tuesday’s close of 5.9880%.
Bond yields move inversely to prices.
“Bonds should remain rangebound for now as there aren’t many domestic triggers. U.S. Treasury moves will be key,” a trader with a state-run bank said.
The U.S. 10-year bond yield rose 1.4% to 4.49% on Monday, up 15 basis points in four sessions and nearing the crucial 4.50% mark.
The yield edged slightly lower in Asian hours on Tuesday, hovering at 4.47%.
U.S. consumer prices rose 0.3% in June, marking the largest increase in five months.
India bonds yields steady around key levels as RBI to mop up liquidity
The uptick, driven by higher costs for some goods, suggests that tariffs are starting to show an impact on inflation, potentially prompting the Federal Reserve to hold off on rate changes until September.
Meanwhile, foreign investors increased allocation to India’s four-year paper as they found the yields attractive, traders said.
These investors net bought more than 13 billion rupees ($151.2 million) of 7.26% 2029 bond in the last two trading sessions, CCIL data showed.
Rates
India’s shorter overnight index swap rates (OIS) barely moved in early deals, while the 5-year rate saw paying pressure due to elevated U.S. Treasury yields.
The one-year was at 5.53% and the two-year OIS rate at 5.50%. The liquid five-year rose 1 basis point to 5.74%.