Indian bond yields remain flat; traders eyeing debt auction, US jobs data

Indian government bond yields were flat in the early session on Friday, with the benchmark yield hovering around the 7 per cent mark, while traders eyed demand for fresh debt supply at an auction and key US jobs data for cues.
 

The benchmark 10-year yield was at 6.9990 per cent as of 10:00 am IST, following its previous close at 6.9994 per cent.
 

New Delhi aims to raise Rs 280 billion ($3.35 billion) by selling bonds through the weekly auction, including the liquid 15-year paper.
 

"With hardly any major trigger for the day, traders would want to see the cutoffs which will give an idea about investor appetite for debt especially after index inclusion," a trader with a private bank said.
 

The auction comes after a tepid start to foreign inflows following the inclusion of Indian debt in JPMorgan's emerging market debt index last week.
 

Foreign investors have net bought less than 50 billion rupees of debt in a week from the inclusion date, compared to earlier estimates of over Rs 150 billion.
 

Meanwhile, the 10-year US yield was at around 4.35 per cent during Asian hours, while US markets were shut on Thursday. They dipped on Wednesday amid growing signs of weakness in manufacturing and the jobs market, suggesting that the world's largest economy was slowing.
 

Investors will now closely track the crucial June nonfarm payrolls data, due later in the day, for guidance on the extent and timing of US rate cuts this year.
 

While the Federal Reserve has lowered its forecast for rate cuts to 25 basis points (bps) in 2024, investors continue to expect 50 bps of cuts.
 

Inflation data in India and the US next week will also provide directional triggers. The benchmark Brent crude futures were trading above the $87 per barrel mark. Elevated oil prices could impact local retail inflation going ahead.