India bond yields little changed as market eyes inflation readings

Indian government bond yields were largely unchanged in the early session on Wednesday, as focus remained on March inflation readings of India as well as the U.S. due later in the day.

The 10-year benchmark 7.26% 2032 bond yield was at 7.2234% as of 10:00 a.m. IST, after closing at 7.2224% on Tuesday. Indian financial markets will be shut on Friday.

“There is no particular trend at current levels, and hence till inflation data, bonds should be trading sideways,” a trader with a primary dealership said.

India’s consumer inflation likely eased in March to 5.80% due to softer food price rises, dipping below the Reserve Bank of India’s (RBI) upper tolerance limit of 6% for the first time in 2023, a Reuters poll of economists found.

The data will follow the RBI’s surprise move last week to hold its key interest rate steady at 6.50%, against analyst expectations of a 25 basis points (bps) hike.

The overnight indexed swap (OIS) rates, often seen as the clearest indication of future policy rate actions, are pricing in interest rate cuts before the end of 2023, analysts said.

This report’s information was first seen on ZAWYA; to read more, click this link.