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Business Recorder
6 days ago
- Business
- Business Recorder
Indian bonds flat ahead of state debt supply, RBI policy decision
MUMBAI: Indian government bonds traded in a tight range in early deals on Tuesday, as investors awaited the state debt supply expected later in the day, and the central bank's monetary policy decision due later this week. The yield on the new benchmark 10-year bond was at 6.2171% as of 10:20 a.m. IST, compared with the previous close of 6.2144%. Bond yields move inversely to prices. 'The higher-than-expected GDP number toned down future rate cuts expectations in the market, and we're now waiting to hear from the horse's mouth (the central bank) for further direction,' said Debendra Kumar Dash, senior vice president of treasury at AU Small Finance Bank. India's gross domestic product (GDP) surged 7.4% in the January-March quarter, much faster than the forecast of 6.7% in a Reuters poll. The Reserve Bank of India is widely expected to cut rates by at least 25 basis points in its monetary policy decision due on June 6, with the focus also on the Governor's commentary to gauge the central bank's rate easing trajectory. India bond yields resume decline as all eyes on RBI decision this week State Bank of India, however, believes there should be a 50-basis-point cut to reinvigorate the credit cycle. India's widening liquidity surplus supported the sentiment, with the daily average surplus at its highest level since July 2022. In May, the daily average surplus stood at nearly 1.71 trillion rupees, more than 20% higher than April. Meanwhile, Indian states are set to sell bonds worth 294 billion rupees ($3.44 billion) later in the day, the highest quantum since the start of the financial year. Rates Volumes in overnight index swaps (OIS) were muted in early trading, and the rates are expected to remain range-bound during the day, traders said. The one-year OIS rate was yet to be traded, while the two-year OIS rate was down 1 basis point at 5.44% The most liquid five-year was slightly lower at 5.65%.
The Sun
13-05-2025
- Business
- The Sun
Indian rupee, bonds poised to rally on ceasefire with Pakistan
MUMBAI: The Indian rupee and bonds are expected to soar this week after a truce was reached and held between nuclear-armed rivals India and Pakistan following the worst clashes between them in nearly three decades. Indian share benchmarks jumped nearly 4% on Monday to log their best day in four years after a ceasefire was announced over the weekend. The rupee and bond markets were closed for a local holiday. Global equities also soared after the U.S. and China reached a deal to slash reciprocal tariffs. The Chinese yuan hit a six-month high while the dollar index rose 1% on easing fears of a damaging trade war between the world's two largest economies. The rupee is set to recoup last week's losses, which were spurred by an intensification of the India-Pakistan conflict and the currency is likely to benefit from a stronger yuan as well, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities. The rupee closed at 85.37 against the U.S. dollar on Friday, falling 0.9% in that week. Traders expect the rupee to strengthen past the 85 mark while encountering resistance around 84.60 and 84.40 levels. Meanwhile, Indian government bond yields are expected to ease back to levels seen before the India-Pakistan conflict flared up last week. The yield on the 10-year benchmark bond rose to a high of 6.44% before closing at 6.37% on Friday. The ceasefire has calmed wary investors, who are likely to resume building positions after the major selloff, traders said. The yield on the benchmark 10-year bond is expected to trade between 6.30% and 6.33% this week, a trader at a private bank said, with a focus on inflation data, the central bank's debt purchase and an auction. 'U.S.-China trade agreement is also a positive for bonds as it is good for the rupee and will further support sentiment,' said Debendra Kumar Dash, senior vice president of treasury at AU Small Finance Bank. India's consumer inflation data for April is due on Tuesday. Economists polled by Reuters expect the key price gauge to have declined to a near six-year low of 3.27%. The Reserve Bank of India is scheduled to purchase 250 billion rupees ($2.95 billion) of bonds on Thursday and New Delhi will sell bonds worth 250 billion rupees on Friday.
The Sun
13-05-2025
- Business
- The Sun
Rupee, bonds to rise after India-Pakistan ceasefire
MUMBAI: The Indian rupee and bonds are expected to soar this week after a truce was reached and held between nuclear-armed rivals India and Pakistan following the worst clashes between them in nearly three decades. Indian share benchmarks jumped nearly 4% on Monday to log their best day in four years after a ceasefire was announced over the weekend. The rupee and bond markets were closed for a local holiday. Global equities also soared after the U.S. and China reached a deal to slash reciprocal tariffs. The Chinese yuan hit a six-month high while the dollar index rose 1% on easing fears of a damaging trade war between the world's two largest economies. The rupee is set to recoup last week's losses, which were spurred by an intensification of the India-Pakistan conflict and the currency is likely to benefit from a stronger yuan as well, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities. The rupee closed at 85.37 against the U.S. dollar on Friday, falling 0.9% in that week. Traders expect the rupee to strengthen past the 85 mark while encountering resistance around 84.60 and 84.40 levels. Meanwhile, Indian government bond yields are expected to ease back to levels seen before the India-Pakistan conflict flared up last week. The yield on the 10-year benchmark bond rose to a high of 6.44% before closing at 6.37% on Friday. The ceasefire has calmed wary investors, who are likely to resume building positions after the major selloff, traders said. The yield on the benchmark 10-year bond is expected to trade between 6.30% and 6.33% this week, a trader at a private bank said, with a focus on inflation data, the central bank's debt purchase and an auction. 'U.S.-China trade agreement is also a positive for bonds as it is good for the rupee and will further support sentiment,' said Debendra Kumar Dash, senior vice president of treasury at AU Small Finance Bank. India's consumer inflation data for April is due on Tuesday. Economists polled by Reuters expect the key price gauge to have declined to a near six-year low of 3.27%. The Reserve Bank of India is scheduled to purchase 250 billion rupees ($2.95 billion) of bonds on Thursday and New Delhi will sell bonds worth 250 billion rupees on Friday. U.S. consumer price inflation and retail sales data, due this week, will be eyed for cues on future Federal Reserve policy rate actions.
