Bond market awaits signals to go dovish

Yields on 10-year bonds could have neared their peak for now and should retrace if there be any positive trigger, sorely missing now.

The 10-year yields closed at 7.85 per cent on Friday. It is a rather sharp move up from the 6.5 per cent level in August, when the Reserve Bank of India (RBI) cut its policy repo rate. Since then, it has been an extended RBI pause but that didn’t deter bond investors from pushing up the yields and demanding higher cut-off in the auctions.

There were certain triggers for that, the most obvious being the drying of liquidity at