• On Wednesday, the 10Y benchmark (6.94% GS 2036) opened steady at 7.08%, as participants remained cautious ahead of the US Fed policy outcome, due post India market hours. • 10Y UST continued to trade near 5% amid elevated Brent crude prices at around $107/bbl, keeping inflationary pressures elevated. • Rate hike bets for the upcoming Fed policy rose, with markets pricing in a 92% probability of a 25 bps hike, as per CME FedWatch. • The 10Y IGB eased to 7.05% intraday, likely supported by buying from some participants at levels seen as attractive. In the weekly T-Bill auction, cut-offs stood at 5.28% for 3M, 5.75% for 6M and 6.04% for 1Y T-Bills. The 10Y point closed the day 2 bps lower at 7.05% vs 7.07%. • Banking system liquidity remained at surplus of around INR 9.8 Tn. RBI conducted multiple VRRR auctions to absorb excess liquidity.
