• On Wednesday, the 10Y benchmark (6.94% GS 2036) opened 2 bps higher at 6.96%, tracking the rise in the 10Y UST yield to around 4.80% and elevated crude prices near $100/bbl. • Brent crude rose above $100/bbl as escalating Middle East tensions, Houthi attacks on Saudi energy facilities and fading hopes of a near-term peace deal raised concerns over prolonged supply disruptions. • The 10Y IGB traded in a range of 6.95%-6.96% as market participants remained cautious ahead of US inflation data on Friday and India CPI data on Monday. • The INR weakened past 95.20/$ during the day amid importer demand for dollars and elevated crude prices above $100/bbl, before recovering to close at 95.10/$, likely supported by RBI intervention. The 10Y point closed the day 2 bps higher at 6.96% vs 6.94%. • Banking system liquidity remained in surplus at ~INR 10.4 Tn. RBI conducted overnight VRRR auction for INR 5 Tn to absorb excess liquidity, accepting INR 4.6 Tn at 5.24%.
