Treasury Gains

Bond yield drop and ₹2.5 trillion RBI OMOs to lift treasury income in Q1FY26 but weak credit growth may weigh on net profits, especially for PSU banks

"This is because the system liquidity surplus is almost Rs 3 trillion and there are expectations of a deeper rate cut," said Anshul Chandak, Head of Treasury at RBL Bank

While a softening of yields was observed on expectations of a rate cut, yields climbed again, tracking the rise in US Treasury yields

Indian 10-year government securities closed at 6.78 per cent on Thursday, while US 10-year treasuries were trading at 4.54 per cent

The US Treasury Department, seeking to keep the Chinese military from gaining an edge in advanced technologies, issued a rule Monday to restrict and monitor American investments in China in artificial intelligence, computer chips and quantum computing. The finalised rule arises from an executive order issued in August 2023 by President Joe Biden. The order sought to limit the access that "countries of concern" specifically China, including Hong Kong and Macao have to American dollars to fund technologies that could be used, for example, to break codes or develop next-generation fighter jets. It will take effect January 2. "US investments ... must not be used to help countries of concern develop their military, intelligence and cyber capabilities," said Paul Rosen, assistant Treasury secretary for investment security. He noted the investments can mean more than just money: they can deliver "intangible benefits," including managerial help and assistance finding top talent and tapping

OIS rates are a crucial indicator reflecting expectations for interest rate changes, and they are the principal tool for hedging interest rate risk in India

Under the new norm, banks must categorise bonds as HTM on a permanent basis, with the exception of 5% of the portfolio that can be withdrawn throughout the year

The hottest conversation topic on every bank's treasury floor is internationalisation of the rupee

The average long-term U.S. mortgage rate rose to its highest level in five weeks, a setback for prospective homebuyers during what's traditionally the busiest time of the year for home sales. The average rate on a 30-year mortgage rose to 6.88% from 6.82% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.27%. When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford at a time when the U.S. housing market remains constrained by relatively few homes for sale and rising home prices. Rates have been mostly drifting higher in recent weeks as stronger-than-expected reports on employment and inflation have stoked doubt among bond investors over how soon the Federal Reserve will move to lower its benchmark interest rate. The central bank has signaled that it expects to cut its short-term rate three times this year once it sees more evidence of cooling inflation. On Wednesday, Treasury yiel

Spot gold was down 0.2 per cent to $2,038.49 per ounce as of 1223 GMT. U.S. gold futures fell 0.2 per cent to $2,045.40

Analysts, however, see limited room for yields and the dollar to extend gains

All three major U.S. indexes started the session with solid gains in a broad rally that favored economically sensitive sectors such as transports, consumer discretionary and materials

The Nasdaq joined the S&P 500 in the red, while defensive stocks helped buoy the Dow into positive territory, while 10-year Treasury yields extended their decline, touching levels last seen in Sept

Gold prices were set for a second weekly decline as US Treasury yields held near multi-year highs following strong labour market data and hawkish comments from Federal Reserve officials

"If a particular allocation across the risky markets spectrum should be low confidence this year, it is the EM overweight," JPMorgan's John Normand wrote in a note to clients on Wednesday

Lower yields should translate into good treasury income lending support to profitability