India’s benchmark government bond yield fell Monday after a nine-week climb as lower U.S. Treasury yields spurred value buying, Reuters reported, even as faster domestic inflation complicated the outlook.
The yield on the 6.94% government bond due in 2036 stood at 7.3551% at 12:55 a.m. ET (04:55 UTC), compared with 7.3789% at Friday’s close, according to Reuters. Bond prices generally move in the opposite direction to yields. Reuters said the benchmark yield had gained 62 basis points over the previous nine weeks.
U.S. Treasury data put the daily 10-year par yield at 5.09% on Oct. 16, down from 5.24% on Oct. 9. The official readings are daily observations, rather than quotes from Monday’s trading.
India’s combined consumer price index rose 5.54% year over year in September, a provisional reading, after a final 4.83% increase in August, government data showed. The Reserve Bank of India (RBI) raised its policy repo rate by 25 basis points to 5.50% on Oct. 7 and adopted a calibrated tightening stance.
The RBI’s policy statement ruled out a near-term rate cut and said its next move could be another increase or a pause. Reuters also reported that Indian overnight indexed swap rates fell: the one-year rate declined seven basis points to 6.48%, and the two-year rate dropped eight basis points to 6.54%.
Oil prices also eased. Brent crude futures were down 2.08% at $107.57 a barrel at 2:19 a.m. ET (06:19 UTC), Reuters reported. The outlet said traders were weighing the possibility of additional Russian fuel exports after a White House order on Oct. 16 waived sanctions, restrictions and duties under the Graham Act.
The RBI is due to publish minutes of its latest policy meeting on Oct. 21. October inflation data are scheduled for Nov. 12, and the RBI’s next policy meeting is set for Dec. 2–4.
