Indian bond yields seen lower tracking fall in oil, U.S. yields
1 min read . Updated: 08 Dec 2022, 08:34 AM IST
PremiumIndian Bond are expected to open lower on Thursday reflecting the trend of falling prices of oil and US yields
Indian government bond yields were expected to open lower on Thursday, tracking a slump in oil prices as well as U.S. yields.
The benchmark 10-year yield was likely to move in a 7.22%-7.27% band today, a trader with a private bank said. The yield ended higher for a fourth straight session at 7.2693% on Wednesday.
"After the relatively hawkish monetary policy, there should be some respite as oil and U.S. yields both easing bodes well for local bonds," the trader said.
U.S. Treasury prices jumped, with the yield on the 1-year note comfortable breaking the 3.50% mark on the downside, as investors doubled down on bets that interest rates have likely peaked and inflation has moderated.
The Federal Reserve monetary policy decision is due next week, with markets broadly expecting a 50 basis points hike.
Meanwhile, oil prices continued their downward momentum, with the benchmark Brent crude contract dropping to its lowest level for 2022 on Wednesday, driven by bigger-than-expected increases in U.S. fuel stocks.
India is one of the largest importers of crude oil, and price movements have direct impact on retail inflation. The data for November is due on Monday, and the reading is expected to fall further after 6.77% on-year rise in October.
Bond yields rose on Wednesday, after the central bank's monetary policy committee raised its key policy rate by 35 basis points to 6.25%, the highest in over three years and its fifth straight increase, and vowed there will be no let up in its fight to tame high inflation.
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KEY INDICATORS: ** Brent crude futures up 0.7% to $77.70 per barrel, after easing over 11% in last four sessions ** 10-year U.S. Treasury yield was at 3.4476% and the two-year note at 4.2914%
This story has been published from a wire agency feed without modifications to the text.
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