• On Thursday, the 10Y benchmark (6.48 GS 2035) opened 1bp higher at 6.95% tracking an overnight rise in Brent crude oil prices due to renewed escalation in the war in West Asia. • During the day, the 10Y yield dropped after the intraday fall in Brent crude oil prices and US Treasury yields. • The focus remained on tomorrow’s auction result and CPI data. The government will see INR 210 bn of 6.36%, 2031 gilt and INR 110 bln of the 7.71%, 2066 gilt at the auction. While, India's CPI inflation for May is expected to come higher than RBI’s 4% target for the month of May. • The rupee slumped against the dollar and ended at a one-week low as banks persistently bought dollars on behalf of oil marketing companies and other importers, who feared further depreciation of the Indian unit amid escalation in the war in West Asia. INR ended at 95.76/$ vs 95.27/$. • The 10Y point ended 2bps lower at 6.92% vs 6.94. The latest system liquidity stands in surplus of ~INR 1460.07 Bn.
