MUMBAI: Indian government bond yields continued to move sideways on Wednesday, as traders awaited fresh triggers, including the latest print on India’s economic growth due this week.

The benchmark 10-year yield was at 7.0634% as of 10:00 a.m. IST, following its previous close of 7.0707%.

“The benchmark should continue to move in a narrow 7.05%-7.08% range, as major events are already behind us, and traders would look at any major surprise in growth data,” a trader with a state-run bank said.

India’s economic growth likely moderated to 6.6% year-on-year in the October-December quarter as government spending slowed and growth in the agriculture sector remained muted, a Reuters poll showed.

The data is due after market hours on Thursday.

Asia’s third-largest economy grew 7.8% and 7.6% in the first two quarters of the current fiscal year, with strong capital expenditure by government ahead of a national election due by May a primary driver.

India’s economy is expected to grow 7.3% in the full fiscal year, giving comfort to the Reserve Bank of India (RBI) to hold steady on interest rates, as it focuses on the “last mile of disinflation”.

India bond yields flattish, investors eye state debt sale for cues

Earlier this month, the RBI maintained status quo on rates for a sixth straight meeting, and reiterated its commitment to meet the 4% inflation target.

The central bank will auction 91-day, 182-day and 364-day of Treasury Bills worth 340 billion rupees (about $4 billion) later in the day.

Earlier this week, a government official said that New Delhi is carrying modest cash balances to meets its spending commitments and would review its borrowing requirements via T-bills soon to see if there is any possibility of cutting it down.

Meanwhile, US Treasury yields remained elevated, with the 10-year yield around 4.30%, as hopes of early Federal Reserve rate cuts ebbed.