Indian government bonds edged lower on Monday, as traders awaited the U.S. Federal Reserve’s policy decision due later this week.
The yield on the 10-year benchmark (IN063335G=CC) settled at 6.4963%, against the previous session’s close of 6.4867%.
Bond yields move inversely to prices.
All eyes are on Fed Chair Jerome Powell’s Wednesday announcement, with traders hunting for dovish signals as the U.S. labour market shows signs of continued weakening.
The market has already factored in a 25-basis-point cut, while the odds of an aggregate of 75 bps of rate cuts from now through December have risen to 83% from 73% last week, according to the CME FedWatch Tool.
The renewal of the U.S. rate-cutting cycle could unlock room for India’s central bank to resume its own easing path, traders said.
The Reserve Bank of India, which aims to keep inflation within the 2%-6% tolerance band, cut rates by 100 basis points so far this year but held…
