Govt bond yields seen steady as markets focus on inflation prints
The RBI last week kept the key interest rate unchanged, retaining its focus on bringing inflation down
 "Govt bond yields seen steady as markets focus on inflation prints")
Indian government bond yields are expected to be largely unchanged at the start of the week as market participants await local inflation data later in the day and the inflation print in the world's largest economy on Wednesday.
The benchmark 10-year yield is likely to move between 6.86 per cent and 6.90 per cent on Monday, compared to its previous close of 6.8812 per cent, a trader with a private bank said.
"Even though local inflation is unlikely to have any major impact, investors would want to get past it before building positions for US retail inflation, which would be a major guide for interest rates," the trader said.
India's July retail inflation will be published after market hours on Monday, and a Reuters poll predicts it to ease below Reserve Bank of India's 4 per cent target for first time in nearly five years.
Inflation likely rose at an annual rate of 3.65 per cent last month, down sharply from 5.08 per cent in June, as rising food costs and hikes in telecom tariffs were offset by a higher base from July 2023.
"The sensitivity from telecom tariff hike is seen staggered on CPI over next three months starting from August," said Siddharth Kothari, an economist with Sunidhi Securities.
The RBI last week kept the key interest rate unchanged, retaining its focus on bringing inflation down even as global market volatility left other major central banks poised to ease.
Meanwhile, the 10-year US bond yield consolidated around 3.95 per cent, after a volatile week that saw the yield crashing to a more than one-year low of 3.67 per cent amid recession fears in the US
The market is almost equally divided between expectation for a 25 basis points and 50 bps rate cut from the Federal Reserve in September, compared to 100 per cent expectation of a 50 bps move early last week, as per the CME FedWatch tool.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)