MUMBAI: Indian government bond yields remained steady in early trades on Thursday, with the benchmark yield holding above the key 6.85% mark as traders awaited key data and Friday’s debt supply.

The benchmark 10-year yield was at 6.8640% as of 10:00 a.m. IST, compared with its previous close of 6.8605%.

“Everyone is waiting for the next trigger, which may come in the form of some data releases, and a break of 6.85% could only revive the market now,” trader with a private bank said.

U.S. growth data is due after Indian market hours on Thursday. Any sign of weakness would raise bets of a 50 basis point rate cut from the Federal Reserve in September.

That report would be followed by the personal consumption expenditures data on Friday, the Fed’s preferred gauge to measure inflation.

Fed Chair Jerome Powell had last week delivered his strongest signal that interest rates will come down in September.

India bond yields drift higher ahead of state debt supply

While a rate cut is certain next month, bets are split between a 25-basis-point and a 50-bp cut, with odds of the latter remaining around 35%. For 2024, markets are expecting cuts of just above 100 bps.

Meanwhile, India’s April-June growth data is due after market hours on Friday, and a Reuters poll expects gross domestic product (GDP) to have grown an annual 6.9%, down from 7.8% in the preceding quarter, due to lower government spending.

Traders also await fresh debt supply as New Delhi will sell bonds worth 300 billion rupees ($3.58 billion) on Friday, including the benchmark bond worth 200 billion rupees, that would take its outstanding issuance o 1.6 trillion rupees.