India bonds stable after benchmark breaches key level on rate-cut hopes
Indian government bond yields held steady early on Thursday, after the 10-year benchmark breached a key level in the previous session amid growing expectations of continued policy easing.
ADVERTISEMENT The yield on the new benchmark 10-year bond was at 6.1712%, as of 10:15 a.m. IST, compared with the previous close of 6.1743%. The 2034 bond yield was at 6.2368% after settling at 6.2383%.
"Bulls are waiting to step in one more time before the growth data, and we will not be surprised if there is an up move in prices before the end of today's session," trader with a state-run bank said.
New Delhi will auction 300 billion rupees ($3.51 billion) of the benchmark 2035 bond on Friday, ahead of January-March GDP data, which is expected to show 6.7% growth versus 6.2% in the prior quarter, according to a Reuters poll.
The Reserve Bank of India is widely expected to deliver a third straight 25-basis-points rate cut at its June 6 policy meeting. The central bank has cut repo rate by 50 basis points since The start of 2025 and has infused around $100 billion into the banking system since December.
ADVERTISEMENT Traders also said bond yields are expected to decline further as broader sentiment remains favourable. RATES Overnight index swap (OIS) rates witnessed shallow trading volumes and with a bais towards paying in early trading. The one-year OIS witnessed was not yet traded after ending at 5.56% on Wednesday, while the two-year OIS rate was at 5.45% and the most liquid five-year was at 5.64%. ($1 = 85.4975 Indian rupees)
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