MUMBAI: Indian government bond yields were largely unchanged in early deals on Friday, as market players awaited fresh supply from the weekly debt auction and key data for further directional moves.
The 10-year bond yield was at 6.7625% as of 10:00 a.m. IST, compared with its previous close of 6.7646%. New Delhi aims to raise 220 billion rupees ($2.56 billion) through the sale of bonds later in the day.
“Demand at the auction followed by US job readings and inflation data would drive the market in the near term,” a trader said.
India bond yields flattish amid consolidation, fresh cues eyed
US Treasury yields remained elevated, with the 10-year yield around 4.68% in Asia hours ahead of a key jobs report that could determine the extent of monetary policy easing by the Federal Reserve.
The nonfarm payroll data for December will be out after Indian market hours, and could throw some light on whether the Fed’s forecast that it will cut rates only twice this year is likely to hold up.
US yields have been rising on concerns that the incoming US President Donald Trump’s policies could reignite inflation in addition to boosting growth, leading to fewer rate cuts.
Interest rate futures are currently pricing in just 43 basis points of US rate cuts in 2025, less than the Fed’s prediction of 50 bps of reductions.
The jobs data would be followed by inflation data in India as well as the world’s largest economy, and these would be the final prints before the central banks of both countries announce their next policy decisions.
Earlier this week, India’s benchmark bond yield eased to a three-week low of 6.73% amid aggressive purchases from foreign banks. However, these lenders later sold bonds as yields in the world’s largest economy rose sharply.
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