scorecardresearchBond yields seen taking a breather after 7-day drop

Bond yields seen taking a breather after 7-day drop

Updated: 16 Nov 2022, 08:15 AM IST
TL;DR.
The benchmark 10-year yield is likely to be in a 7.25%-7.30% band for the session, a trader with a private bank said.
FILE PHOTO: The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai, India, February 2, 2016. REUTERS/Danish Siddiqui/File Photo

FILE PHOTO: The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai, India, February 2, 2016. REUTERS/Danish Siddiqui/File Photo

(Reuters) - Indian government bond yields are expected to open little changed, after easing for the last seven sessions, as traders await fresh triggers.

The benchmark 10-year yield is likely to be in a 7.25%-7.30% band for the session, a trader with a private bank said.

The yield ended lower for a sixth straight session at 7.2613% on Tuesday and has declined 22 basis points in the last seven sessions.

Inflation data in the United States and India have raised hopes that future rate hikes will be in smaller quantum and "days of aggressive policy tightening are behind us," a trader with a state-run bank said.

India's annual retail inflation eased to a three-month low of 6.77% in October, slightly higher than economists' forecast of 6.73%, but below the September reading of 7.41%.

Market participants expect inflation to gradually inch down hereon, providing room for the Reserve Bank of India to go slow on rate hikes, starting from its next policy on Dec. 7. It has raised the repo rate by 190 basis points since May, to 5.90%.

Meanwhile, U.S. yields eased on safe-haven demand after reports that Russian missiles hit Poland, which raised fears about greater geopolitical risks in the region.

Yields also fell after data showed U.S. producer prices increased less than expected in October, further supporting the case for slowing down monetary policy tightening.

KEY INDICATORS:

** Brent crude futures were 0.4% lower at $93.50 per barrel, after rising 0.7% in the previous session

** 10-year U.S. Treasury yield was at 3.7826% and the two-year note at 4.3403%

** Reserve Bank of India to auction Treasury Bills worth 220 billion Indian rupees 

First Published: 16 Nov 2022, 08:15 AM IST