India's 10-year bond has best day in 3 months on Treasury rally, easing oil
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In a notable market shift, Indian government bonds experienced a significant rise as the benchmark 10-year bond yield dropped considerably. This trend followed a favorable boost from Treasuries and decreasing crude prices. Additionally, the Federal Reserve's more dovish approach has had a generally positive effect on the bond landscape. Anticipation builds for the upcoming bond auction, with many investors eyeing potential attractive buy opportunities due to the current yield levels.
Indian government bonds jumped on Thursday, with the benchmark 10-year bond posting its best day in three months, as Treasuries rallied and crude prices eased, prompting short covering.The yield on the benchmark 6.94% 2036 bond dropped 5 basis points to 7.3902%, its biggest fall since July. Bond prices rise when yields fall.
The move gathered pace after the 10-year US Treasury yield slid 4.5 basis points to 5.00% in Asian hours, easing the global borrowing-cost backdrop. Meanwhile, Brent crude fell 1.3% to $113.70 a barrel on hopes of peace talks.
Bonds Corner Powered By India bonds seen attracting buyers as 10-year yield nears 2022 levels
Yields on India's battered government bonds may be approaching territory that more investors consider a "buy", with that on the benchmark 10-year approaching 7.50%, a level not seen in four years.
Indian bonds track US Treasuries higher amid oil-price reliefPersistent Systems to raise Rs 6,000 crore via NCDs for Nagarro dealPatna to raise Rs 200 crore via municipal bondsRBI accepts 20 bps higher treasury bill cutoff yields than last auction Browse all Bonds News withYields on India's battered government bonds may be approaching territory seen as a buying opportunity, investors said.
The Federal Reserve's less hawkish pause also helped the market. The Fed left rates unchanged on Wednesday, as expected, and chair Kevin Warsh's remarks were viewed as less hawkish than feared, leading markets to pare expectations for further US tightening.
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"It was certainly less hawkish and gives breather space for the RBI also to pace out the rate hikes," said Kruti Chheta, Mumbai-based fund manager at Mirae Asset Mutual Fund.
The Reserve Bank of India raised the repo rate and adopted a tighter policy stance earlier this month, signalling more rate increases may follow.
Investors await the government's 330 billion rupee ($3.47 billion) bond auction on Friday. Strong bidding could validate the bond rally and bring yields down further, traders said.
RATES
OIS rates were mixed. The long end tracked the Treasury rally, while short maturities were muted amid tight liquidity.
The one-year OIS was flat at 6.68%. The two-year OIS fell 1.5 bps to 6.7250%, while the five-year fell 2.75 bps to 6.85%.
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
