India bond yields seen a tad higher ahead of debt supply
INDIA-MARKETS/BONDS:INDIA BONDS-India bond yields seen a tad higher
By Dharamraj Dhutia
MUMBAI, Dec 13 (Reuters) - Indian government bonds are expected to rise marginally in early deals on Friday, as market participants await a fresh supply of debt through the weekly auction, while elevated U.S. yields will continue to weigh on sentiment.
The benchmark 10-year yield is likely to move between 6.72% and 6.75% till the debt auction, a trader with a private bank said, compared with its previous close of 6.7396%.
"With inflation prints out of the way, the focus is on demand-supply dynamics as well as elevated Treasury yields, so bias would be on the selling side, at least till the auction," the trader said.
New Delhi aims to raise 370 billion rupees ($4.36 billion) through the sale of bonds later in the day, and the auction includes 220 billion rupees of the benchmark bond.
U.S. yields rose on Thursday, with the 10-year yield staying above the 4.30% mark in Asia hours, as investors worried about the Federal Reserve's rate easing cycle in 2025.
The rise comes after U.S. November inflation data was in line with estimates, cementing a rate cut by the Fed next week, but making the outlook for the next year bleak.
The U.S. central bank is also expected to take a hawkish tone, and may signal that it is likely to pause rate cuts in January, traders said.
Meanwhile, India's retail inflation eased to 5.48% in November as soaring vegetable prices moderated during the month due to an improvement in supply, data showed on Thursday.
The print was lower than the 14-month high of 6.21% recorded in October and below economists' estimate of 5.53% in a Reuters poll.
The data gathers more prominence in the wake of expectations that the appointment of a new governor at the Reserve Bank of India will mean a looser monetary policy stance. KEY INDICATORS: ** Brent crude futures little changed at $73.40, after easing 0.2% in the previous session ** Ten-year U.S. Treasury yield was at 4.3238%; two-year yield was at 4.1906% ** India to sell sovereign bonds worth 370 billion rupees ** RBI to set underwriting fees for 370 billion rupees for sovereign bond auction
** RBI to conduct 14-day variable rate repo auction for 750 billion rupees ($1 = 84.8700 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Janane Venkatraman)
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First Published:13 Dec 2024, 08:31 AM IST
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