India Bond Yields Little Changed Ahead Of State Auction Result

Tuesday,   22-Jun-2021   01:21 PM (IST)

Indian federal government bond yields were little changed in the afternoon session, as traders awaited the outcome of a 191-billion-rupee state debt sale today. The benchmark 5.85% bond maturing in 2030 changed hands at 98.77 rupees, yielding 6.02%, at 1:00 p.m. in Mumbai, against 98.72 rupees, yielding 6.03%, at previous close. The Indian rupee was at 74.15 to the dollar against 74.10 yesterday. Earlier today, the benchmark Brent oil contract crossed $75 per barrel mark and hit a 26-month high on hopes of a quick recovery in oil demand in the U.S. and European markets along with fading expectations of an early return of Iranian crude to the market. The contract was little changed at $74.83 per barrel. High crude oil prices can push India's inflation trajectory as the country imports nearly 85% of its crude oil requirements. New Delhi will sell 260 billion rupees of bonds on Friday, including 140 billion rupees of the benchmark. Some market participants expected the issuance of a new 10-year bond. Meanwhile, the 10-year U.S. Treasury yield jumped six basis points yesterday, and was at 1.499%. Federal Reserve Chair Jerome Powell noted the recent pickup in inflation but added that it would likely move back to near 2% once the supply side transitory effects fade.