US Treasury rally may lift India bonds at open
In short
Indian government bonds were expected to start Thursday on a firmer note because US Treasury yields fell.
The 6.94% 2036 bond closed at 7.3999%, and traders were still cautious because of the RBI’s tough rate outlook and worries that September inflation may go above 6%. It is not yet clear what the RBI will do next.
What the reporting says
Indian government bonds were expected to open stronger on Thursday as US Treasury yields retreated, with the 6.94% 2036 bond projected to stabilize after closing at 7.3999%. The reporting also said the Reserve Bank of India’s hawkish rate outlook and fears that September inflation may breach 6% were keeping traders cautious. What happens next for yields depends on inflation data and RBI action, which remain uncertain.
Why it matters
Indian government bonds were set to benefit early Thursday from lower US Treasury yields, while the 6.94% 2036 bond was expected to stabilize after a 7.3999% close. The market remained cautious because the RBI has kept a hawkish tone and September inflation was projected to cross 6%. The source does not say whether those forecasts will prove correct or how far yields will move.