INDIA BONDS — India bonds to edge up on steady US yields, oil prices

By Khushi Malhotra MUMBAI, Sept 30 (Reuters) — Indian government bonds may firm modestly on Wednesday, buoyed by steadier US Treasury yields and oil prices, while investors look for cues on the Reserve Bank of India's rate trajectory as US rate hike expectations ease. The benchmark 6.94% 2036 bond yield may trade in the 7.14% to 7.18% range after ending at 7.1628% on Tuesday, a private bank trader said, adding that a sustained break below the key 7.15% level could unleash some buying. The 10-year yield was headed for its biggest monthly rise, as oil prices sustained above $100 a barrel, US yields scaled multi-decade highs and RBI rate hike bets hardened. "Some analysts expect the RBI to raise rates by as much as 100 basis points in 12 months, as elevated global yields and oil prices holding above $100 have dispelled expectations of a shallow tightening cycle," a trader at a primary dealership said. Traders are bracing for a potential rate hike by the RBI next week, its first since February 2023. Markets may draw relief from a slight dip in oil prices, with Brent futures trading at $103 a barrel, after easing 2.5% in the previous session. Brent is still set for a monthly gain of.