India bond yields flat as traders await directional cues
By Bhakti Tambe
MUMBAI, Aug 19 (Reuters) -Indian government bond yields ended little changed on Monday as most traders refrained from placing large bets amid a lack of directional cues.
The benchmark 10-year yield IN071034G=CC ended at 6.8653%, compared with its previous close of 6.8700%.
Traders will watch out for minutes from the latest policy meetings of the U.S. Federal Reserve and the Reserve Bank of India (RBI), both due later in the week.
U.S. Treasury yields eased on Friday, partly reversing the previous day's big gains as investors digested data showing a resilient U.S. consumer and inflation trending lower, leaving the Fed ample scope for a small interest rate cut next month.
"The narrative around U.S. recession is gradually fading off," said Anitha Rangan, an economist at Equirus Group.
A healthy U.S. retail sales data and a smaller-than-expected rise in weekly unemployment claims on the heels of benign inflation readings restored confidence in the economic picture last week.
"US job gains, and non-farm payroll data will be watched for. A normalizing inflation could drive the first Fed rate cut in Sept’24 if labour market supports. But it will be normalizing cut and not a recessionary cut."
Interest rate futures traders scaled back bets that the Fed would need to cut 50 basis points when it next meets in September. They now see a 74% chance of a 25 bps ease in the policy rate. FEDWATCH
In India, the RBI kept its key rate unchanged earlier this month, while maintaining its focus on bringing inflation down. Equirus' Rangan expects the central bank to maintain a status quo throughout the current fiscal year till March.
India's retail inflation fell in July to a near five-year low, as food inflation eased due to a base effect.
On Tuesday, seven states aim to raise nearly 138 billion rupees ($1.65 billion) via a bond sale.
($1 = 83.8440 Indian rupees)
Reporting by Bhakti Tambe; Editing by Nivedita Bhattacharjee
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
