• On Friday, the benchmark 10Y bond (6.94% GS 2036) opened 3 bps lower at 7.26%, tracking decline in 10Y UST to 5.25%. • 10Y UST eased to 5.25% after strong demand at the 30-year bond auction and President Trump’s comments that US will not attack Iran before mid term elections supported sentiment. • 10Y IGB hardened to 7.29 levels as some participants placed short bets ahead of the weekly IGB auction. • The cut offs at the weekly IGB auction were broadly on expected lines with 7.06% GS 2041 coming at 7.4898% and 7.43% GS 2076 at 7.8015%. 10Y point closed the day 1 bp higher at 7.30% vs 7.29%. • Banking system liquidity remained in surplus at ~INR 3.88 Tn. RBI conducted multiple VRRR auctions to absorb excess liquidity. INR closed the day at 96.73/$ with DXY hovering around 102.3.
