MUMBAI: Indian government bond yields are likely to rise on Monday morning tracking US Treasury yields, even as investors await the release of key inflation data this week.
The new 10-year benchmark 7.18% 2033 bond yield is likely to be in a 7.15-7.20% range on Monday after ending the previous session at 7.1774%, a trader with a private bank said.
“There should be some upmove at open, but broadly yields would be in a narrow range. Inflation data would be the key driver for the week,” the trader said.
US yields rose, with the 10-year rate at 4.30%, amid fears that interest rates will remain higher for longer.
Even though the US Federal Reserve is not expected to hike rates next week, the odds of a hike in November are nearly 50%.
Crude oil prices also remained elevated, with the benchmark Brent contract staying above the $90-per-barrel mark. India is one of the largest importers of the commodity.
India’s retail inflation data is due after market hours on Tuesday, while US inflation data is due on Wednesday.
These prints come ahead of monetary policy decisions by central banks in both countries.
India’s retail inflation will likely ease in August from a 15-month high in July but hold above the upper end of the Reserve Bank of India’s 2%-6% target range for a second month, a Reuters poll found.
The poll of 45 economists predicted the August print at 7%, against 7.44% in July.
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