What’s going on here?
As the year wraps up, Indian bond yields are climbing, following similar trends seen in US Treasuries, while the rupee hits new lows due to strong dollar demand.
What does this mean?
With many trading desks operating on a skeleton crew during the holidays, Indian bond yields are set to rise, mirroring the jump in US Treasury yields. Trading activity has slowed considerably, with Indian bonds averaging just 381 billion rupees in volume recently, as reported by the Clearing Corp of India. In the US, Treasury yields are on the rise, with the 10-year nearing an eight-month peak, as investors prepare for potential interest rate changes next year. The Federal Reserve’s updated projection for a 50 basis-point rate cut in 2025 adds caution to the market, highlighted by CME’s FedWatch Tool, now showing an 89% chance of a pause in January.
Why should I care?
For markets: Rising yields and falling rupees.
The Indian rupee has…
