• On Friday, the 10Y benchmark (6.94% GS 2036) opened steady at 7.04% ahead of the weekly IGB auction, as participants remained cautious. • Decline in Brent crude prices to around $102/bbl, amid easing Saudi supply concerns following efforts to restore the damaged East-West pipeline, supported bond yields. • The cut offs for the weekly IGB auction came broadly on expected lines with 7.06% GS 2041 coming at 7.2305% and 7.43% GS 2076 at 7.6863%. • The 10Y point hardened to 7.06%, tracking the intraday rise in Brent crude to around $103.5/bbl and the 10Y UST to 4.97%, before closing the day 2 bps higher at 7.07% vs. 7.05%, as some participants trimmed positions. • Banking system liquidity remained at surplus of around INR 6.9 Tn. RBI conducted 3 day VRRR auction for INR 2.25 Tn to absorb excess liquidity, accepting INR 2.22 Tn at 5.24%.
