Written by Dharamraj Dutia
MUMBAI, Oct 31 (Reuters) – Indian government bond yields eased in early trading on Tuesday ahead of new bond supply while investors await the U.S. Federal Reserve’s monetary policy decision due this week. It is likely to remain almost flat.
Benchmark 10-year Treasury yields are expected to range between 7.34% and 7.38%, after closing at 7.3701% in the previous session, according to traders at private banks.
Indian states aim to raise 254 billion rupees ($3.05 billion) through bond sales later in the day. According to the auction calendar, Quantum is worth over Rs 1,560 crore.
“We are likely to see range trading again today, with continued focus on investor appetite and national debt reduction,” the trader said.
“Unless there is a new catalyst, it is unlikely that the benchmark yield will break above the resistance level of 7.38%.”
India’s benchmark bond yields have hovered in a narrow range of 7.31-7.39% over the past 10 sessions as traders wait for bond sales by the Reserve Bank of India (RBI). .
Earlier this month, RBI Governor Shaktikanta Das said the central bank aims to sell bonds through auctions to manage liquidity in the banking system.
Markets expect such sales to be around Rs 500 billion this quarter, but investors are uncertain when they will start selling, especially as central banks ramp up bond sales through screen-based trading. is.
The yield on the US 10-year government bond was around 4.90%. The Fed is expected to keep interest rates on hold, but Chairman Powell’s comments will be important.
The benchmark Brent crude oil contract fell below $90 a barrel ahead of a major central bank meeting and as tensions in the Middle East remain high. Key indicators: ** Brent crude oil futures rose 0.7% to $88.05 per barrel, after easing 3.3% in previous trading. ** 10-year US bond yield is 4.8878%, 2-year bond yield is 5.0436% ** 15 Indian states raise $254.00 from bond sale to 1 billion rupees ($1 = 83.2430 Indian rupees) (Reporting by Dharamraj Dhutia, Edited by Mrigank Dhaniwala)
