What’s going on here?
Indian government bond yields edged higher, trailing the upward trend of US bond yields, with the 10-year yield closing at 6.8700%, up from 6.8580%.
What does this mean?
The ripple effect from the US markets is palpable in India. Strong US economic data diminished the chances of a significant Fed rate cut in September. With the US consumer price index (CPI) rising by 0.2% in July and jobless claims falling to 227,000 last week, bond yields climbed as fears of a hard economic landing eased. As a result, 75% of traders expect a modest 25 basis point Fed rate cut next month, down from a higher anticipated cut earlier in the week. Meanwhile, the Reserve Bank of India (RBI) kept its key interest rate steady, indicating a potential rate cut in December if economic conditions remain stable.
Why should I care?
For markets: Steadying the ship.
Indian investors need to watch the US economic scene closely. Rising US bond…
