MUMBAI: Indian government bond yields were marginally down early on Wednesday amid a pullback in US Treasury yields, while traders still assessed the pace of foreign inflows into debt after domestic securities were included in a global index.

The benchmark 10-year yield was at 7.0030% as of 10:00 a.m. IST, following its previous close of 7.0112%.

“Though there are no immediate positive triggers, the market is also sure that yields do not have much upside, and since the 10-year US yield has not crossed the 4.50% handle, we are seeing marginal easing,” the trader said.

The 10-year US yield eased to 4.44% on Tuesday after job openings, a measure of labour demand, rose 221,000 to 8.140 million on the last day of May, the lowest level since February 2021.

Federal Reserve Chair Jerome Powell said the central bank still needed more data before cutting interest rates to ensure that recent weaker inflation readings give a true picture of underlying price pressures.

Investors continue to anticipate 46 basis points of rate cuts from the Federal Reserve in 2024, with first action in September, according to the CME FedWatch tool.

Back home, investors continue to gauge the pace of foreign inflows into Indian government bonds over the next few days after an underwhelming response so far, since the inclusion of local debt in the JPMorgan index on June 28.

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

Foreign investors have bought bonds under the Fully Accessible Route (FAR), which are now a part of the index, worth only 37.7 billion rupees ($451.42 million) on a net basis in first three days of the index inclusion.

New Delhi will sell bonds worth 280 billion rupees on Friday and shorter-dated treasury bills worth 200 billion rupees later in the day.