Yields end the day higher • On Tuesday, the 10-year benchmark government bond (6.33% GS 2035) opened steady at 6.49%. • Over the day, the 10Y yield dropped to 6.48% on value-buying by market participants. However, the 10Y point hardened as traders trimmed positions due to security concerns after Pakistan blamed India for retaliatory attacks to the New Delhi incident. • Meanwhile, SDL auction overall witnessed robust demand for bonds maturing in the 10-12 year segment. Tamil Nadu did not accept bids for 15-year paper, however, RBI offered 12Y Maharashtra at 7.25%, 11Y Uttar Pradesh at 7.24%. • Indian rupee ended weaker at 88.57/$ despite optimism over possibility of US-India trade deal. • Traders are likely to wait for India’s CPI inflation data due tomorrow along with any escalation in India-Pakistan conflict. The IGB 10Y bond yield ended 2 bps higher at 6.51% vs 6.49%. The latest banking system liquidity stands in surplus of ~INR 2013.66 Bn
