MUMBAI: Indian government bond yields were largely unchanged in early deals on Friday as market participants awaited debt supply and key economic growth data that could act as a major directional trigger.

The benchmark 10-year bond yield was at 6.8024% as of 9:45 a.m. IST, compared with its previous close of 6.8039% on Thursday.

“(The) Debt auction demand is expected to be normal, but the major factor is growth reading,” a trader with a primary dealership said.

“A reading of 6%-6.1% could see a rally in bond prices as that would put the central bank under pressure to ease rates.”

Economists in a Reuters poll estimate India’s economy grew 6.5% in July-September, the slowest pace in one-and-a-half years, due to slackening demand.

The actual extent of the slowdown will help traders mould expectations on when the Reserve Bank of India will cut interest rates.

The RBI has maintained its GDP growth forecast of 7.2% for the fiscal year, down from 8.2% in the previous fiscal year, while several economists have lowered their projections.

New Delhi will sell bonds worth 300 billion rupees ($3.55 billion) later in the day, which includes the liquid seven-year paper and new 10-year green bonds.

India bond yields to trend higher as US peers spike

Meanwhile, the 10-year US Treasury yield was around the 4.25% mark, following weak consumer sentiment surveys in Europe, while US inflation concerns took a temporary backseat as personal consumption expenditure data came in line with estimates.

Investors have pencilled in a 67% chance that the Federal Reserve will cut rates in December, up from 56% last week.