What’s going on here?
Indian government bond yields are anticipated to drop, mirroring the trends seen in the US bond market following lower-than-expected producer price data.
What does this mean?
The benchmark 10-year yield in India is expected to fluctuate between 6.85% and 6.89%, a slight drop from its previous close of 6.8786%, according to a trader from a primary dealership. This change aligns with the US bond market, where yields eased after July’s Producer Price Index (PPI) increased by just 0.1%, below expectations. Investors are now focusing on the upcoming US Consumer Price Index (CPI) data to complete the inflation outlook. With inflation slowing and the labor market cooling, there’s growing speculation that the Federal Reserve (Fed) will begin to ease in September. Likewise, India’s retail inflation dropped to 3.54% in July, the lowest since August 2019, aided by falling vegetable prices and a high base effect.
Why should…
