The benchmark 10-year yield is expected to hover in a 7.03%-7.08% range, following its previous close of 7.0572%, a trader with a private bank said.
Indian government bond yields are likely to trend lower at the start of the week, tracking a decline in U.S. Treasury yields, as weak economic data aided bets on easing monetary policy. The benchmark 10-year yield is expected to hover in a 7.03%-7.08% range, following its previous close of 7.0572%, a trader with a private bank said.
“We may see some bullish moves as the 10-year U.S. yield has ended below the critical level of 4.20% after some days, and if the trend persists, technically it opens the door for a move towards the 4% mark,” the trader said. U.S. yields eased on Friday, with the 10-year yield easing to levels last seen three weeks ago after U.S. manufacturing slumped further in February, marginally improving bets for May rate cuts by the Federal Reserve.
The odds for a rate cut in May improved to 28%, up from 24% last week, according to the CME FedWatch tool. Back home, traders continue to await fresh domestic cues at a time when central government bond supply has stopped, while states continue to undershoot their borrowing on a consistent basis.
Indian states aim to raise 279.81 billion rupees ($3.38 billion) through the sale of bonds, against the 381.66 billion rupees on the calendar. Meanwhile, India’s economy grew 8.4% in the October-December quarter, much faster than market estimates of 6.6% and also higher than the 7.6% growth in the previous three months, but did little to alter rate cut expectations.
However, the third-quarter GDP print may be overstating growth, economists said, pointing to a more modest increase in gross value added in the economy. In February, the central bank kept rates unchanged for a sixth consecutive time and reiterated its commitment to meet its 4% inflation target on a sustainable basis.
Source:financialexpress.com