India's Call rate closed at 7.5% - ICICI Bank - Treasury Research

Indian Government bonds traded in a narrow band in the early session today as investors awaited further cues from RBI's open market operations (OMO) conducted later in the day. Sentiment also remained cautious amidst rising political uncertainty while focus remained on the Parliamentary proceedings. Meanwhile, gilts received some support in later trade as the RBI bought back bonds worth INR 96.58 bn through the OMO auction, close to the intended target of INR 100 bn. However, the upside was capped ahead of the auction of INR 150 bn of dated securities due later this week. The benchmark 8.15% 2022 bond yield closed at 7.74%, as against yesterday's close of 7.75%.

India's call rate closed at 7.25%, lower than the previous close of 7.40%. The RBI injected INR 1014.60 bn (gross) into the banking system today, as against INR 976.30 bn (gross) yesterday.

US Treasuries are trading lower ahead of the fresh supply of debt lined up this week, which includes USD 32 bn of 3-year notes due today, USD 24 bn of 10-year debt tomorrow and USD 16 bn of 30-year bonds on Thursday. Treasuries also remained under pressure as positive labour market data released last week continued to weigh on expectations of an expansion of asset purchases by the Fed. The 10-year yield is currently trading at 1.77% a tad higher than yesterday's close 1.76%. (17:30 IST)

Source : Equity Bulls

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