Indian government bond yields rose on Tuesday as a spike in Treasury yields and a shift in the domestic debt auction methodology weighed on sentiment in the first trading session for debt markets in the new financial year.
However, the rise was capped by the government’s plan to auction a new 10-year bond on Friday, which will replace the existing benchmark soon.
The yield on the existing benchmark 10-year was at 7.0835% as of 10:00 a.m. IST on Tuesday, following its close of 7.0556% on Thursday. The markets were shut on Friday and Monday.
“The immediate trigger is the jump in U.S. yields as that could have a long-standing impact on overall yield scenario,” a trader with a state-run bank said.
U.S. yields rose on Monday as stronger-than-expected manufacturing data raised doubts about whether the Federal Reserve could cut interest rates thrice this year.
The 10-year U.S. yield was above 4.30%, with the odds of a rate cut in June easing…
