MUMBAI: Indian government bond yields are expected to be little changed on Thursday as traders await key US jobs data and the Reserve Bank of India’s (RBI) policy meeting.
Investors will also keep an eye on the escalating Middle East conflict following Iran’s missile attack against Israel.
The benchmark 10-year yield is likely to move between 6.71% and 6.75%, compared with its previous close of 6.7339%, a trader with a private bank said. US Treasury yields rose on Wednesday after economic data pointed to a stable labour market.
US private payrolls increased more than expected by 143,000 jobs in September, above the 120,000 estimate of economists polled by Reuters.
The more comprehensive US employment report for September, due on Friday, is crucial as policymakers have signaled that the Federal Reserve’s primary focus has shifted from combating inflation to ensuring a stable labour market.
The Fed kicked off its rate cut cycle in September with a big 50-basis-point reduction and is expected to cut interest rates again in November and December.
This has led to hopes that India’s central bank could also ease policy from next week, starting with a change in the stance.
India’s 10-year bond yield hits 31-month low; traders eye debt supply
The central bank is expected to cut policy rates and change the stance to neutral in December, with food inflation pressures expected to ease as supplies improve, Gaura Sen Gupta, chief economist at IDFC First Bank, said.
Oil prices rose on worries that the escalating conflict in the Middle East could threaten supplies from the world’s top producing region.
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