India bond yields little changed, traders eye key US and local data
By Nimesh Vora
MUMBAI, Nov 26 (Reuters) -Indian government bond yields were barely changed on Tuesday, with traders eyeing important local and U.S. economic data for cues on interest rates' trajectory.
The benchmark 10-year bond yield IN067934G=CC was at 6.8201% at 10:50 a.m. IST compared with 6.8226 in the previous session. In opening trades, the yield dropped to 6.8074% and is currently at the day's highs.
It was "largely expected" that near 6.80% there will be supply, a fixed income trader at a bank said.
"A drop below that level will happen, if at all, only post the Friday data."
On Friday, India will report the September quarter growth data, which economists forecast will show that the economy likely grew at its slowest pace in one-and-a-half years.
Bond market participants will closely watch the data to gauge the extent of the slowdown in Asia's third-largesteconomy. Some economists reckon that slowing growth would prompt the Reserve Bank of India to cut rates at the February meeting.
At the December policy meeting the RBI is widely expected to keep rates unchanged, considering the high October inflation data.
TheU.S. core Personal Consumption Expenditures (PCE) data will be released on Wednesday and will provide insights on whether the Federal Reserve will cut rates at the December meeting.
Right now, it is nearly a coin toss on what the Fed will decide in December, per the interest rate swap market. Donald Trump's election victory has increased the uncertainty on the direction of U.S. interest rates.
Trump's win has prompted investors to price in fewer Fed rate cuts through 2025.
Reporting by Nimesh Vora
Editing by Eileen Soreng
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