MUMBAI: Indian government bonds traded lower on Monday, as U.S. bond yields pulled back from last week’s highs, although the decline in the countries were limited because the traders were waiting for a better supply than planned from the states.
The 10-year benchmark 7.26% 2032 bond yielded at 7.3992% at 10:10 am IST, after closing as low as 7.4161% on Friday. The market will be closed on Tuesday for a local holiday.
“The moment in the US rate started to look worried but there was a little cold and, therefore, the index has returned below the 7.40% high,” said a trader and a banker the state.
Bank earnings fell on Friday, after hitting new highs earlier in the week, after the Federal Reserve’s comments temporarily calmed inflation fears. the price and interest.
The 10-year U.S. yield touched a four-month high of 4.09% on Thursday, but eased as it appeared to be short-lived, traders said. It followed at 3.95%.
Treasury yields rose on bets that the Fed could keep raising rates for a long time.
The Fed has raised rates by 450 basis points (bps), to 4.50%-4.75%, last year and at least three other rounds of 25 bps each have been fully approved.
Meanwhile, Indian states are expected to raise 289.58 billion rupees ($3.54 billion), which is more than the planned amount for the first time in seven months.
The high supply comes at a time when worries about high inflation – prices jumped 6.52% in January – continue to dampen sentiment.
Indian bonds are easy to find after weaker-than-expected growth
Barclays expects a rate of 6.3% for February.
The Reserve Bank of India has raised the repo rate by 250 bps since May 2022, to 6.50%, and is widely expected to raise it another 25 bps in April.