India bonds: RBI debt sale, Treasury yields may cap gains
Indian government bond yields could face headwinds from an upcoming debt sale by the Reserve Bank of India and elevated U.S. Treasury yields, potentially capping any gains from falling oil prices. The benchmark 6.94% 2036 bond yield is expected to trade between 7.05% and 7.09% on Monday. The RBI will sell bonds worth 250 billion rupees ($2.61 billion) to withdraw liquidity from the banking system, and rate hike bets in India have hardened.
By Dharamraj Dhutia MUMBAI, Sept 21 (Reuters) — Indian government bond market traders could once again try to push prices higher at the start of the week after witnessing declines in oil prices, but elevated Treasury yields and a debt market sale could cap the move. 09% on Monday, according to a trader with a primary dealership. 0686% in the previous session. The yield has jumped 31 basis points in the last five weeks.
S. and Iran remain in a stalemate. 50 per barrel, after hitting a high of almost $110 last week. "Oil can be called marginally supportive, but a firm push is needed below $100 per barrel for the 10-year yield to dip to anywhere close to the 7% mark," the trader said.
61 billion), through an open market sale, in what would be its second such operation in its series of steps to withdraw liquidity from the banking system. 2% of total bank deposits, with its first debt sale operation in nine years worth 500 billion rupees. Rate hike bets in India have also hardened after the Federal Reserve's move, with many now expecting the RBI to raise the repo rate by 25 bps on October 7. S.
Treasury yield stayed sticky around 5%, after the Fed hinted at one more rate hike before the end of 2026. Rates Overnight indexed swap rates are expected to move only slightly. 5875%. com)