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Business Recorder
11 hours ago
- Business
- Business Recorder
India bonds extend fall as August rate-cut bets fade
MUMBAI: Indian government bonds fell for a fifth straight session on Monday, as investors scaled back bets of an interest rate cut in the near term following comments from the central bank chief. The yield on the benchmark 10-year bond ended at 6.3700%, compared with Friday's close of 6.3505%. The yield has risen about 7 basis points in the last five sessions. Bond yields move inversely to prices. Reserve Bank of India Governor Sanjay Malhotra on Friday told Financial Express in an interview that monetary policy will place greater focus on the outlook for growth and inflation, rather than their current levels. Malhotra added that the bar for further easing is higher than it would have been if the stance was 'accommodative'. Traders had expected easing inflation to lead to another rate cut. Still, a majority of economists polled by Reuters expect the central bank to keep rates on hold when it announces its next policy decision on August 6. India's ABSL AMC ups long-duration government bond bets, sees more rate easing 'Bond markets traded in a narrow range with a weakening bias on receding expectations of an additional rate cut(s) by the RBI after marginally hawkish commentary by the Governor,' said Upasna Bhardwaj, chief economist at Kotak Mahindra Bank. Investors also await the Federal Reserve's policy decision, due on Wednesday. The U.S. central bank is widely expected to keep rates unchanged. Rates India's overnight index swap rates rose marginally as sentiment soured in the derivatives market. The one-year OIS rate ended at 5.54% and the two-year OIS rate at 5.52%. The liquid five-year OIS rate settled at 5.74%.
Economic Times
20 hours ago
- Business
- Economic Times
India bonds may continue to see selling pressure at start of week
Indian government bonds are likely to see persistent selling pressure in early deals on Monday, as sentiment remains cautious after the benchmark bond yield rose above a key level in the previous session. ADVERTISEMENT The yield on the benchmark 10-year bond is likely to move between 6.33% and 6.37%, a trader at a private bank said, after closing at 6.3505% on Friday - the highest level since May 9. "Traders are losing interest and not building fresh positions, and hence we witnessed a large selloff after the debt auction on Friday," the trader said. The Reserve Bank of India sold 300 billion rupees ($3.47 billion) of the benchmark 2035 bond on Friday, the cutoff for which was in line with estimates, but the note witnessed selling pressure after the result was announced. Selling was exacerbated after the RBI governor's comments curbed expectations for rate easing, prompting those who were betting on an August cut to pare positions. ADVERTISEMENT Sanjay Malhotra said monetary policy, being forward-looking, will place greater focus on the outlook for growth and inflation, rather than their current levels, when the policy panel meets on August 6. Malhotra added that the bar for further easing is higher than it would have been if the stance was accommodative, though the RBI still has the flexibility to move the rates up, down or pause. ADVERTISEMENT A plunge in India's retail inflation to a more than six-year low and expectations that it will slip to a record low in July have led to increased talk of a rate cut in August. ADVERTISEMENT India's overnight index swap rates rose on Friday, as market participants trimmed rate cut bets for next week. The one-year OIS rate ended at 5.53% on Friday and the two-year OIS rate ended at 5.51%. The liquid five-year OIS rate settled at 5.73%. KEY INDICATORS: ** Benchmark Brent crude futures were 0.4% higher at $68.70 per barrel after easing 1.1% in the previous session ** Ten-year U.S. Treasury yield at 4.3938%; two-year yield at 3.9296% ($1 = 86.4750 Indian rupees). (You can now subscribe to our ETMarkets WhatsApp channel)
Business Recorder
3 days ago
- Business
- Business Recorder
India bonds drop to 11-week low as RBI commentary adds to bearish cues
MUMBAI: Indian government bonds fell on Friday, as hawkish commentary from India's central bank governor, coupled with higher U.S. Treasury yields and oil prices, curbed appetite for debt. The yield on the benchmark 10-year bond ended over 2 basis points higher at 6.3505%, the highest since May 9, compared with a previous close of 6.3276%. Bond yields move inversely to prices. Traders pared positions after the weekly debt auction, as a slew of negative cues soured sentiment. 'While the auction was subscribed fully, there is no further incentive for fresh buying as rising U.S. yields, oil prices anddeclining rupee are all negative for bonds,' said Debendra Kumar Dash, senior vice president of treasury at AU Small Finance Bank. The 10-year U.S. Treasury yield was at 4.4117% in Asian hours, up over 8 basis points from Tuesday's low of 4.33%. Meanwhile, oil prices rose 0.23% to $69.34 per barrel. The central bank governor's fireside chat at a Financial Express event also curbed expectations for rate easing, traders said, prompting those who were betting on an August cut to pare positions. India bonds end steady as lack of cues continue to dominate Malhotra said monetary policy, being forward-looking, will place greater focus on the outlook for growth and inflation, rather than their current levels, when the policy panel meets on August 6. With retail inflation falling to a six-year low and likely to hit a record low in July, calls for at least one more rate cut had ramped up. Malhotra added that the bar for further easing is higher than it would have been if the stance was accommodative, though the central bank still has the flexibility to move the rates up, down or pause. Rates India's overnight index swap rates rose due to high paying pressure as traders unwound earlier receiving positions. The one-year OIS rate ended 3 basis points higher at 5.53% and the two-year OIS rate rose nearly 5 bps to 5.51%. The liquid five-year OIS rate also rose 5 bps to 5.73%.
Business Recorder
6 days ago
- Business
- Business Recorder
India bonds end steady as lack of cues continue to dominate
MUMBAI: Indian government bond yields ended largely flat on Wednesday, extending a recent trend of muted moves, as traders looked for fresh cues ahead of a debt auction later this week. The yield on the benchmark 10-year bond ended at 6.3117%, after closing at 6.3069% on Tuesday. New Delhi will sell bonds worth 360 billion rupees ($4.16 billion) on Friday, including 300 billion rupees of the benchmark, taking the outstanding issuance to 1.2 trillion rupees. Traders are also gauging the developments of expectations of yet another interest rate cut by the Reserve Bank of India, as early as August. 'The RBI monetary policy committee's rate review in early August is expected to be the next catalyst, with consensus split between a rate cut or a pause, at this juncture,' said Radhika Rao, executive director and senior economist at DBS Bank. A plunge in India's retail inflation rate to 2.10% in June, the slowest pace in more than six years, has led to increased talk of an interest rate cut on August 6. Indian bond yields expected to show a slight decline An estimated drop in inflation to a record low in July is further pushing up rate cut calls, with ICICI Bank recommending August would be an appropriate time for a 25-basis-point cut, given the muted inflation scenario. Investors will also watch out for the Federal Reserve's policy decision on July 30 for signals on the domestic interest rate trajectory. Most investors expect the Fed to keep rates unchanged, while any commentary from the central bank's chief would be key. Rates India's overnight index swap rates (OIS) remained largely unchanged, barring the ultra-short end swaps that witnessed some paying. The one-year OIS rate ended at 5.485% and the two-year OIS rate ended at 5.455%. The liquid five-year OIS rate finished at 5.6675%.
Economic Times
6 days ago
- Business
- Economic Times
India bonds little changed as traders await fresh cues
Indian government bonds traded in a tight range on Wednesday, as traders sought directional cues ahead of Friday's auction. ADVERTISEMENT The yield on the benchmark 10-year bond was at 6.3055% as of 10:25 a.m. IST, after closing at 6.3069% on Tuesday. Bond yields move inversely to prices. "Bonds (yields) are expected to oscillate between 6.29%-6.32% unless there are some further forecasts on inflation or GDP, which will give further clarity on (the) rate easing cycle," a trader at a foreign bank said. New Delhi will sell bonds worth 360 billion rupees ($4.17 billion) on Friday, including 300 billion rupees of the benchmark bond, taking the outstanding issuance to 1.2 trillion rupees. There could be a moderate sell-off before the auction as traders free up space in their books to participate, traders said. ADVERTISEMENT Investors will also watch out for the Federal Reserve's policy decision on July 30 for signals on the domestic interest rate trajectory. Most investors expect the Fed to keep rates unchanged, while any commentary from the central bank's chief would be key, traders said. ADVERTISEMENT The 10-year U.S. Treasury yield added 3 basis points in Asian hours to 4.36%, after falling for three days, dampening sentiment in the domestic market. The U.S. Treasury yields spiked after fresh data showed retail sales in the world's largest economy rebounded in June, supporting the Fed's hesitance in resuming policy easing. ADVERTISEMENT RATESIndia's overnight index swap rates (OIS) barely moved in early trading, as traders held back awaiting fresh cues on interest rates. The one-year OIS rate was at 5.49% and the two-year OIS rate was unchanged at 5.46%. The liquid five-year OIS rate hovered around 5.68%. ($1 = 86.3800 Indian rupees) ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
