MUMBAI: Indian government bond yields are expected to rise in early trading at the start of the week, tracking a spike in US Treasury yields after strong economic data weighed on bets of rate cuts in world’s largest economy.

India’s benchmark 10-year yield is likely to move in a 7.01%-7.06% range on Monday, following its previous close of 7.0168%, a trader with a state-run bank said.

The yield posted a weekly rise last week, after easing for six.

“Any scope for the benchmark yield to ease below 7% would be negated for now, as Treasury yield is nearing the 4.50% mark in a week which is filled with market moving events,” the trader said.

US yields rose after the economy created far more jobs than expected in May and annual wage growth re-accelerated, as nonfarm payrolls increased by 272,000 jobs, against economists’ expectations of payrolls advancing by 185,000.

May’s employment gains were higher than the 232,000 monthly average for the past year.

Average hourly earnings rose 0.4% after having slowed to a 0.2% rate in April.

Wages increased 4.1% in the 12 months through May following an upwardly revised 4.0% annual rise the prior month.

The US 10-year yield jumped 15 basis points on Friday and remained around the 4.45% mark in Asian hours.

India bonds not reacting to strong domestic growth, yields little changed

The odds of a rate cut in September have declined to 47% from 68% a week ago, while the probability of aggregate rate cuts in 2024 is down to 36 bps, against nearly 50 bps last week, according to the CME FedWatch tool.

Back home, the Reserve Bank of India kept the key interest rate unchanged for the eighth consecutive time on Friday as robust economic growth continues to provide space to focus on bringing down inflation to its medium-term target of 4%.