MUMBAI: Indian government bond yields are expected to edge lower in early trades on Friday, mirroring a decline in US Treasury yields, while traders will keenly watch New Delhi’s debt sale due later in the day.
The yield on the 6.79% government bond maturing in 2034 is expected to trade between 6.25%-6.30%, a trader with a private bank said, compared with the previous close of 6.2742%.
The yield on the new 10-year benchmark 6.33% bond maturing in 2035 is also seen 1-2 bps lower, after closing at 6.2302% in the previous session.
The yield on the US 10-year note was down nearly 3 bps in Asian hours at 4.4275%, as data showed deceleration in the world’s largest economy in April, including drops in producer prices, manufacturing output, and a slowdown in retail sales.
Meanwhile, New Delhi is set to sell bonds worth 250 billion rupees ($2.93 billion) later in the day.
“For the old 10-year, 6.25% is the next key level, which can trigger profit booking,” a trader at a primary dealership said.
India bond prices slip as declining US peers weigh on sentiment
“If buying still persists, looks like we are heading toward 6.225%.”
Bond yields ended lower on Thursday as state-run banks lapped up debt after they sold bonds to the central bank in its debt purchase, traders said.
State-run banks bought 67.5 billion rupees worth of bonds on a net basis, while private and foreign lenders were on the selling side, along with mutual funds and primary dealers.
American Dollar Exchange Rate