India Bond Yields Flat as Traders Eye Fed Meet, Union Budget

Indian government bond yields were flattish at the beginning of the week as traders awaited the United States Federal Reserve’s policy decision and the domestic budget announcement for directional cues.

India’s benchmark 10-year yield was at 7.1757% as of 10:05 a.m. IST, on Monday, following its past shut down at 7.1760%.

“We are probably going to see next to no move in securities today, as the market is currently hanging tight for the significant occasions, which would be the directing variable for the excess quarter of this monetary year,” a broker with a state-run bank said.

Security yields facilitated insignificantly after benchmark security saw solid interest at the last sale in front of the spending plan declaration on Feb. 1.

India’s administration might keep its gross market yield for 2024/25 near the ongoing monetary year’s level as it hopes to limit borrowings, two government sources told Reuters.

Rather than the anticipated 15.43 trillion rupees this year, the government may set its gross borrowing goal for the upcoming fiscal year at between 15 trillion rupees ($180.40 billion) and 15.50 trillion rupees.

In spite of being a political decision year, with Top state leader Narendra Modi looking for an uncommon third back to back term in power, the public authority is probably going to decrease monetary deficiency by something like 50 premise focuses.

A Reuters survey likewise anticipated the financial shortage as a level of Gross domestic product to decline to 5.30% in 2024/25 from 5.90% this monetary year, with extended gross getting of 15.60 trillion rupees.

After strong economic data prompted a reduction in bets on the timing and pace of rate cuts in 2024, attention is also on the Fed’s meeting on January 30-31.

The chances for a rate activity in Spring stand around 48%, down from 87% last month, as per the CME’s FedWatch Device.

Due to rising tensions in the Middle East, oil prices also increased, with the benchmark Brent crude contract moving closer to $85 per barrel.