Business
India 10-year bond yield rises to 7.1391%
The Hindu BusinessLine··1d ago
Indian government bonds fell early Friday, on course for a sixth straight weekly loss. The benchmark 6.94% 2036 bond yielded 7.1391% at 11:15 a.m. IST, its highest intraday level since May 20. India is set to sell Rs 34,000 crore of the 10-year note later in the day. The US 10-year Treasury yield rose above 5.20%, its highest since 2007.
Prism
What It Means For You
- Higher yields raise borrowing costs as India auctions Rs 34,000 crore of 10-year notes.
- Most market participants expect an RBI rate rise on October 7 after August inflation hit 4.82%.
- Brent crude near $105 a barrel is keeping inflation risks elevated for oil-importing India.
What's Happening
- The India 10-year yield was up about 7 basis points this week.
- Japan's 10-year yield rose to 3.115%, a level last seen in August 1996.
- Germany's 10-year yield hit a 17-year high of 3.5798%.
Why yields are climbing
- A sharp selloff in US Treasuries battered sentiment before the Indian debt auction.
- The RBI is draining surplus liquidity through open market sales and reverse repos.
- A senior state-run bank official said an October hike looks definite.
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