Indian Government bonds traded lower on Friday - ICICI Bank : Treasury Research

Indian Government bonds traded lower today amidst further depreciation in the Rupee, which weighed on the prospects of a rate cut by the RBI in the July meeting. Intraday losses in US Treasuries coupled with rise in crude Brent crude oil prices also weighed on the gilts. The benchmark 7.16%2023 bond came under further pressure as the cut-off yield in today's auction came in at 7.48%, sharply higher than expectations of 7.45%. However, the cut-off yields on the other three securities offered for sale in the INR 150 bn auction were largely lower than consensus. The old benchmark 8.15% 2022 bond yield closed at 7.64%, as against previous close of 7.60% while the new 7.16% 2023 ended the day at 7.50%, as against yesterday's close of 7.42%.

India's call rate closed at 5.50% as against previous close of 6.35%. The RBI injected INR 76.95 bn (gross) into the banking system today, as against INR 116.90 bn (gross) yesterday.

US Treasuries are trading lower due to better than expected nonfarm payrolls data, which came in at +195K for June vs. consensus +165K. Also positive risk sentiment and gain in global equities weighed on the safe heaven demand for Treasuries. The benchmark 10-year yield is currently trading at 2.67%, higher than previous close of 2.50%. (18:15 IST)

Source : Equity Bulls

Keywords