MUMBAI: Indian government bond yields rose marginally in early trading on Monday, tracking higher oil prices, while market participants continue to await fresh triggers.

The 10-year benchmark bond yield was at 7.2273% as of 10:00 a.m. IST, after ending the previous session at 7.2168%.

Oil prices jumped more than 4% on Friday and nudged higher on Monday, extending gains on expectations of OPEC+ deepening supply cuts to shore up prices.

The Organization of the Petroleum Exporting Countries and their allies including Russia, is set to consider whether to make additional oil supply cuts when it meets on Nov. 26.

The benchmark Brent crude contract, however, remained around $80 per barrel.

The move in oil prices is crucial for India, which the third-largest importing country of the commodity.

India’s retail inflation eased to a four-month low of 4.87% in October, edging closer to the central bank’s 4% target.

“The domestic bond yields have eased in tandem with US Treasury yields in the last few days and that will continue. The market will continue to track US bonds and oil prices for directional cues,” a trader with a primary dealership said.

India bond yields dip, debt sale limits move

The benchmark bond yield posted its biggest weekly decline in more than six months last week, as US yields and oil prices slipped.

US Treasury yields continued their decline on Friday, after hitting 16-year highs in late October, as a string of economic data boosted market expectations that the Federal Reserve is done with its rate hiking cycle.

The 10-year US yield was last at 4.4471%, while 2-year yield was at 4.8834% in Asian hours.

Traders are also keeping a close eye on whether Indian bonds will be included in Bloomberg Global Aggregate and the Emerging Market Local Currency indexes, after JPMorgan included bonds in its emerging market index in September.