Latest news with #governmentbonds
Reuters
10 hours ago
- Business
- Reuters
Resurgence of India rate-cut wagers revives foreign investor interest in bonds
MUMBAI, July 22 (Reuters) - Foreign appetite for Indian government bonds is back, with inflows picking up steadily over the last month, as investors gauge fresh expectations of a rate cut by the Reserve Bank of India as early as August. The RBI cut rates by a larger-than-expected 50 basis points in June and changed the stance to "neutral", prompting investors to bet on a prolonged pause. But a sharp drop in June retail inflation has some investors reassessing the likelihood of another rate cut. The RBI could implement a modest 25 basis point cut in August if inflation remains subdued and growth concerns persist, said Singapore-based Manish Bhargava, CEO of Straits Investment Management, adding that bond yields are attractive at current levels. Over the last one month, foreign investors have net bought 129 billion rupees ($1.5 billion) of Indian bonds linked to global indexes after selling more than 330 billion rupees in the first two-and-a-half months of the financial year that started on April 1, clearing house data showed. Analysts said concerns on the growth front are also likely to prompt the central bank to lower rates further. With recent high-frequency data disappointing and indicating the possibility of a further slowdown in growth, "there is potential for more support from the RBI further down the line," said London-based Giulia Pellegrini, lead portfolio manager, emerging market debt at AllianzGI. India's overall economic fundamentals remain solid, keeping the country on investors' radar, she said. A wider gap between interest rates in India and the U.S. would add to the appeal of Indian debt, investors said. That's why a Federal Reserve rate cut could act as a positive catalyst for Indian bonds, as they have historically helped local currency debt markets, said Nigel Foo, Singapore-based head of Asian fixed income at First Sentier Investors. However, current Indian bond yields are lower than where they were in the past at similar policy rate levels, and so are relatively unattractive, he added. The 10-year U.S. yield was around 4.35%, with the Fed expected to cut rates by at least 50 bps in 2025. The Indian 10-year benchmark bond yield was at 6.30%. "India's local debt story remains very compelling on both FX and rates," said Jean‑Charles Sambor, head of emerging markets debt at TT International Asset Management in London, who expects bond yields to decline through this year and next, and finds the middle of the yield curve attractive. ($1 = 86.2470 Indian rupees)
Bloomberg
18 hours ago
- Business
- Bloomberg
A Top Indian Pension Fund Manager Is Betting on 30-Year Bonds
A top private pension fund in India is doubling down on 30-year government bonds after a recent selloff. The yield gap between India's 30- and 10-year sovereign notes has widened to levels last seen four years ago, after the central bank in June signaled that it may not cut rates further soon. This makes long-tenor bonds attractive for pension funds, which typically seek to lock in higher returns for longer periods.
Bloomberg
21 hours ago
- Business
- Bloomberg
Japanese Bonds, Stocks Vulnerable as Unpopular Ishiba Holds On
Japanese government bonds are vulnerable to further selling when trading resumes Tuesday following a historic election defeat for Prime Minister Shigeru Ishiba. The outlook for stocks remains clouded by tariffs and the yen faces downside risks from the prospect of more government spending.
Bloomberg
4 days ago
- Business
- Bloomberg
Treasuries Recover Ground as JPMorgan Sees Lingering Powell Risk
US Treasuries pared some of their weekly losses on Friday while the dollar fell at the end of a week dominated by debate about the trajectory and leadership of the Federal Reserve. Yields on 10-year US government bonds inched lower to 4.45% — just three basis points higher on the week — while 30-year yields were on track to finish below 5% for the first time since Monday. A gauge of the dollar dropped 0.2% after a Fed policymaker publicly pushed to cut interest rates later this month.
Wall Street Journal
5 days ago
- Business
- Wall Street Journal
Eurozone Countries Will Find Buyers as They Increase Debt, But at a Cost
Eurozone countries should find plenty of buyers as their debt issuance increases, albeit at a higher cost and tilted more towards shorter-dated bonds, analysts said. Government bond supply is set to grow after North Atlantic Treaty Organization allies agreed to raise defense spending to 5% of GDP by 2035 from 2% now, with only Spain getting an opt-out. The eurozone's stable political backdrop and slowly recovering economy are expected to attract investors, with demand already strong.
