India bond yields await directional cues as 10 year Treasury hits 4.20%
MUMBAI: Indian government bond yields were flat in the early trading session on Tuesday, with the 10-year US counterpart rising above the crucial 4.20% mark. The benchmark 7.26% 2033 bond yield was at 7.2068% as of 10:00 a.m. IST after ending the previous session at 7.2047%. The yield posted its biggest single-session rise in nearly three weeks on Monday. “We are unlikely to see any major moves today, while bulls are staying away from the market for now with US Treasury crossing 4.20% mark,” a trader with a primary dealership said. Indian states are scheduled to raise 157 billion rupees ($1.90 billion) through a sale of bonds later in the day, while New Delhi aims to raise 330 billion rupees via a debt sale on Friday, including the new 10-year bond that will replace the existing benchmark paper soon. The 10-year US yield moved above the 4.20% level on Tuesday, sustaining the rise after the August non-farm payrolls report showed that the world’s largest economy added more jobs than expected last month. Still, the odds of another rate hike by the Federal Reserve later this month declined, easing to around 7%. Traders are assessing the evolving domestic liquidity situation ahead of the Reserve Bank of India’s (RBI) review of its decision to levy incremental cash reserve ratio on banks due by Sept. 8. They are also keeping an eye on the inflation trajectory and expect another elevated reading for August after retail inflation spiked to a 15-month high of 7.44% in July from 4.87% in June. DBS expects inflation reading to remain above 7% in August and slip to 6% levels in September.
Karobar
MUMBAI: Indian government bond yields were flat in the early trading session on Tuesday, with the 10-year US counterpart rising above the crucial 4.20% mark.
The benchmark 7.26% 2033 bond yield was at 7.2068% as of 10:00 a.m. IST after ending the previous session at 7.2047%.
The yield posted its biggest single-session rise in nearly three weeks on Monday.
“We are unlikely to see any major moves today, while bulls are staying away from the market for now with US Treasury crossing 4.20% mark,” a trader with a primary dealership said.
Indian states are scheduled to raise 157 billion rupees ($1.90 billion) through a sale of bonds later in the day, while New Delhi aims to raise 330 billion rupees via a debt sale on Friday, including the new 10-year bond that will replace the existing benchmark paper soon.
The 10-year US yield moved above the 4.20% level on Tuesday, sustaining the rise after the August non-farm payrolls report showed that the world’s largest economy added more jobs than expected last month.
Still, the odds of another rate hike by the Federal Reserve later this month declined, easing to around 7%.
Traders are assessing the evolving domestic liquidity situation ahead of the Reserve Bank of India’s (RBI) review of its decision to levy incremental cash reserve ratio on banks due by Sept. 8.
They are also keeping an eye on the inflation trajectory and expect another elevated reading for August after retail inflation spiked to a 15-month high of 7.44% in July from 4.87% in June.
DBS expects inflation reading to remain above 7% in August and slip to 6% levels in September.
