scorecardresearchBond yields rise marginally as traders await debt supply

Bond yields rise marginally as traders await debt supply

Updated: 06 Jan 2023, 10:41 AM IST
TL;DR.
  • The benchmark 10-year yield was at 7.3368% as of 10:05 a.m. IST, after ending at 7.3271% on Thursday.
The benchmark 10-year yield was at 7.3368% as of 10:05 a.m. IST, after ending at 7.3271% on Thursday.

The benchmark 10-year yield was at 7.3368% as of 10:05 a.m. IST, after ending at 7.3271% on Thursday.

(Reuters) - Indian government bond yields were marginally higher on Friday, as traders turned cautious ahead of the first weekly government debt auction of the year.

The benchmark 10-year yield was at 7.3368% as of 10:05 a.m. IST, after ending at 7.3271% on Thursday.

New Delhi aims to raise 280 billion rupees ($3.39 billion) through the sale of bonds later in the day and the auction includes 120 billion rupees of the benchmark note.

There is a gradual upward move in bond yields, and with more supply coming in, there are high chances of the benchmark yield touching 7.35% today, a trader with a state-run bank said.

Due to the lack of major positive cues during the week, outstanding short positions in the benchmark bond touched 100 billion rupees.

Market participants await the U.S. non-farm payroll data due later in the day, which will provide more clarity on the Federal Reserve's interest rate moves.

Inflation data for India and the U.S. follow, both due next week.

Barclays expects a headline retail inflation of 5.96% for India in December, with core inflation at 6%. But, with inflation still very close to the Reserve Bank of India's (RBI) upper tolerance level of 6%, the brokerage continues to expect an interest rate hike in February.

Inflation eased to 5.88% in November, coming in 6% for the first time in eleven months. However, core inflation stayed above 6%.

The central bank has hiked the repo rate by 225 basis points in 2022, to 6.25%, in its fight against inflation.

Traders also await the federal budget announcement, likely on Feb. 1, for the next financial year's borrowing plan.

Meanwhile, the 10-year U.S. Treasury yield hovered around 3.70%, and the benchmark Brent crude contract stayed below $80 per barrel.

 

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First Published: 06 Jan 2023, 10:41 AM IST