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Business Recorder
3 days ago
- Business
- Business Recorder
India bonds flat; traders eye debt supply, RBI liquidity move
MUMBAI: Indian government bonds ended largely unchanged on Thursday as traders awaited a fresh debt supply and further cues on liquidity management from the central bank. The yield on the benchmark 10-year bond ended at 6.3156%, after closing at 6.3136% on Wednesday. Bond yields move inversely to prices. 'Market sentiment remains cautious amid tight liquidity signals from the Reserve Bank of India via Variable Rate Reserve Repos (VRRR),' Pawan Somani, founder of Infinask Advisors, said. The 10-year note has hovered between 6.28% and 6.32% since the start of the month, and the trend is likely to continue amid fresh triggers, traders said. New Delhi plans to sell bonds worth 250 billion rupees ($2.92 billion) on Friday, including a new seven-year note. RBI's liquidity withdrawal move weighs on India bond prices The note traded at around 6.25% in the 'when-issued' segment of the trading platform on Thursday. Market focus is also on liquidity levels in the banking system and on any further measures by the RBI to drain the surplus. The RBI's second liquidity-absorbing operation in four sessions on Wednesday pushed overnight rates above the floor of the policy corridor. The newly launched Secured Overnight Rupee Rate (SORR) has stayed above the floor of monetary policy corridor for the second straight session after slipping below the Standing Deposit Facility rate on Monday and Tuesday. The central bank removed 973 billion rupees via a two-day VRRR\ on Wednesday. Traders said clarity on a potential U.S.-India trade deal, which U.S. President Donald Trump said was 'close', would be a key trigger for the market. Rates India's overnight index swap rates (OIS) were mostly flat as traders awaited more cues, with the trading range shrinking across the curve. The one-year OIS rate was at 5.515%, and the two-year OIS rate was at 5.4875%. The liquid five-year OIS rate was at 5.69%.
Business Recorder
18-06-2025
- Business
- Business Recorder
Indian bond yields little changed as focus remains on oil moves
MUMBAI: Indian government bond yields ended largely unchanged on Wednesday as market participants closely tracked oil prices, which have witnessed a spike due to the recent escalation in the Israel-Iran conflict. The benchmark 10-year bond yield ended at 6.2615%, compared with Tuesday's close of 6.2646%. Pawan Somani, founder of Infinask Advisors cited negative sentiment from the rise in global crude oil prices following continued geopolitical uncertainty. 'Weakness in rupee and cautiousness ahead of Fed outcome resulted in subdued volumes,' he added. The benchmark Brent crude contract was around $76 per barrel and is up more than 10% in the last four sessions after concerns over supply disruptions rose due to the Middle East conflict. India imports most of its crude requirements and elevated prices could pose an upside risk to the inflation outlook, thwarting the limited possibility of another rate cut from the Reserve Bank of India. Indian bond yields, swap rates ease after dovish comments from RBI chief Bond yields had dipped on Tuesday after dovish commentary from RBI Governor Sanjay Malhotra, who said inflation below the central bank's current projections could open up policy space and that the change in stance does not imply an immediate reversal in the policy cycle. Earlier this month, the RBI cut its key policy rate by a steeper-than-expected 50 basis points but changed its stance to 'neutral' stance from 'accommodative', leading analysts to suggest the easing cycle has ended. The minutes of this meeting are due after market hours on Friday. Traders also await the Federal Reserve policy decision due after Indian market hours. Even though no rate action is anticipated, the major focus would remain on guidance and signals on the quantum of cuts in 2025. Rates Indian overnight index swap (OIS) rates ended marginally higher amid shallow trading volumes. The one-year OIS rate ended at 5.48% and the two-year OIS rate ended at 5.46%. The liquid five-year OIS rate ended at 5.5.68%.
