What’s going on here?
Indian bond yields are on track to dip slightly, swayed by decreasing US Treasury yields, with the benchmark 10-year yield expected to settle between 6.72% and 6.75%.
What does this mean?
A drop in US Treasury yields followed surprising November payroll figures, sparking talk of a potential rate cut by the Federal Reserve this month. This pushed US 10-year yields to a seven-week low of around 4.15%. Market consensus sees an 83% chance of a 25 basis point rate cut by the Fed, up from last week’s 66%, with prior cuts totaling 75 basis points since September. Meanwhile, India’s Reserve Bank of India (RBI) has kept its rates steady but is injecting liquidity by cutting banks’ cash reserve ratio by 50 basis points. This move is aimed at boosting economic activity, with markets eyeing a possible 25 basis point repo rate cut as the RBI approaches February.
Why should I care?
For markets: Treasury yield shifts ripple…
