MUMBAI: Indian government bond yields were higher in the early session on Tuesday, as a recovery in oil prices and a fresh supply from state debt sale lead traders to cut bond holdings.
The benchmark 10-year yield was at 7.2925% as of 10:10 a.m. IST. The yield fell three basis points on Monday to end at 7.2736%.
Nine states aim to raise $1.56 billion through five-year to 21-year bond sales.
“Since the benchmark yield is unable to break the crucial 7.26% handle comfortably, we will continue to see reversals from these levels,” a trader with a private bank said, adding that benchmark bond yield should broadly remain in 7.26%-7.32% band until the Reserve Bank of India’s monetary policy decision due on Dec.7.
Easing retail inflation has increased hopes that the central bank may go slow on its pace of interest rate hikes after raising repo rate by 190 basis points in May-September period.
Market participants are also exercising caution ahead of India’s July-September economic growth data due on Wednesday.
The economy likely returned to a more normal 6.2% annual growth rate in July-September, according to a Reuters poll.
GDP data will be followed by US non-farm payrolls on Friday. The Fed has raised rates by 375 basis points (bps) so far in 2022, with a 67% probability of a 50 bps move next month.
The 10-year US yield was at 3.70%.
Meanwhile, global crude oil contracts inched near $84.50 per barrel, after easing for last four consecutive sessions weighed down by concerns about slowing fuel demand in top crude importer China due to strict Covid-19 curbs.
Any movement in oil prices has a direct impact on local inflation as India is one of the largest importers of the commodity.
The benchmark 10-year yield was at 7.2925% as of 10:10 a.m. IST. The yield fell three basis points on Monday to end at 7.2736%.
Nine states aim to raise $1.56 billion through five-year to 21-year bond sales.
“Since the benchmark yield is unable to break the crucial 7.26% handle comfortably, we will continue to see reversals from these levels,” a trader with a private bank said, adding that benchmark bond yield should broadly remain in 7.26%-7.32% band until the Reserve Bank of India’s monetary policy decision due on Dec.7.
Easing retail inflation has increased hopes that the central bank may go slow on its pace of interest rate hikes after raising repo rate by 190 basis points in May-September period.
Market participants are also exercising caution ahead of India’s July-September economic growth data due on Wednesday.
The economy likely returned to a more normal 6.2% annual growth rate in July-September, according to a Reuters poll.
GDP data will be followed by US non-farm payrolls on Friday. The Fed has raised rates by 375 basis points (bps) so far in 2022, with a 67% probability of a 50 bps move next month.
The 10-year US yield was at 3.70%.
Meanwhile, global crude oil contracts inched near $84.50 per barrel, after easing for last four consecutive sessions weighed down by concerns about slowing fuel demand in top crude importer China due to strict Covid-19 curbs.
Any movement in oil prices has a direct impact on local inflation as India is one of the largest importers of the commodity.
For all the latest business News Click Here
Denial of responsibility! TechAI is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
