Mumbai: Indian government bond yield US yields tracked gains in early trade on Wednesday, even as most market participants stayed away ahead of quarter-end and calendar year ends.
The benchmark 10-year yield was up 7.3217% as of 10:00 AM IST, after ending at 7.3077% on Tuesday.
A trader at a state-owned bank said the 10-year US yield has seen a sharp correction, and this has resulted in negative sentiment in the Indian market. “If it weren’t for the quarter-end, we could have seen huge moves.”
US Treasury prices fell, with the 10-year yield rising as much as 3.86% earlier in the day, as investors tried to assess the way forward for interest rate hikes by the Federal Reserve and China looked to further ease its COVID-19 restrictions. decided to.
The yield eased to 3.40% earlier this month amid fears of a policy pivot by the Fed, but the central bank maintained a dovish tone.
The 10-year yield gained more than 10 basis points (bps) this week, after a massive 27 bps rise last week.
The Fed has raised interest rates by 425 bps in 2022 to a range of 4.25%-5.00%, and is expected to raise rates by another 75 bps in 2023, continuing its fight against inflation in the new year.
More rate hikes by the Fed could put similar pressure on the Reserve Bank of India (RBI), which raised the repo rate by 225 bps to 6.25% in 2022 to rein in inflation.
Traders said the next major trigger could be the Union Budget, which will detail the 2023-2024 supply calendar for the next year.
Meanwhile, the central government will raise 300 billion rupees ($3.62 billion) through bond sales on Friday, while the RBI will auction treasury bills worth 220 billion rupees later in the day.
The benchmark 10-year yield was up 7.3217% as of 10:00 AM IST, after ending at 7.3077% on Tuesday.
A trader at a state-owned bank said the 10-year US yield has seen a sharp correction, and this has resulted in negative sentiment in the Indian market. “If it weren’t for the quarter-end, we could have seen huge moves.”
US Treasury prices fell, with the 10-year yield rising as much as 3.86% earlier in the day, as investors tried to assess the way forward for interest rate hikes by the Federal Reserve and China looked to further ease its COVID-19 restrictions. decided to.
The yield eased to 3.40% earlier this month amid fears of a policy pivot by the Fed, but the central bank maintained a dovish tone.
The 10-year yield gained more than 10 basis points (bps) this week, after a massive 27 bps rise last week.
The Fed has raised interest rates by 425 bps in 2022 to a range of 4.25%-5.00%, and is expected to raise rates by another 75 bps in 2023, continuing its fight against inflation in the new year.
More rate hikes by the Fed could put similar pressure on the Reserve Bank of India (RBI), which raised the repo rate by 225 bps to 6.25% in 2022 to rein in inflation.
Traders said the next major trigger could be the Union Budget, which will detail the 2023-2024 supply calendar for the next year.
Meanwhile, the central government will raise 300 billion rupees ($3.62 billion) through bond sales on Friday, while the RBI will auction treasury bills worth 220 billion rupees later in the day.