India 10Y Yield Falls on US Treasury Decline
The yield on India’s 10-year G-Sec fell to around 7.36%, extending losses for another session as a sharp decline in US Treasury yields spurred value buying, offsetting inflation concerns from elevated crude oil prices. Indian yields tracked the US 10-year Treasury yield’s decline to around 5.05% amid expectations that the Federal Reserve may delay its next rate hike until December. Easing oil prices following a potential improvement in Russian supply also supported Indian yields. However, upside inflation risks persist, with September consumer inflation accelerating to 5.54% and potentially exceeding the RBI’s 6% upper tolerance limit in October. Meanwhile, expectations of further RBI tightening, growing bets on a 50-basis-point rate hike in December, and tighter banking-system liquidity continue to weigh on sentiment.
The yield on India’s 10-year G-Sec fell to around 7.36%, extending losses for another session as a sharp decline in US Treasury yields spurred value buying, offsetting inflation concerns from elevated crude oil prices. Indian yields tracked the US 10-year Treasury yield’s decline to around 5.05% amid expectations that the Federal Reserve may delay its next rate hike until December. Easing oil prices following a potential improvement in Russian supply also supported Indian yields. However, upside inflation risks persist, with September consumer inflation accelerating to 5.54% and potentially exceeding the RBI’s 6% upper tolerance limit in October.
Meanwhile, expectations of further RBI tightening, growing bets on a 50-basis-point rate hike in December, and tighter banking-system liquidity continue to weigh on sentiment.