• On Wednesday, the 10Y benchmark (6.94% GS 2036) opened steady at 7.01%, tracking crude brent crude near $98.5 levels. • Brent crude traded below $100/bbl amid easing supply concerns, following reports of Saudi Arabia resuming operations on its East-West Pipeline and hopes of progress in US-Iran peace talks. • Over the day, 10Y IGB yields hardened to 7.04% as some participants likely placed short bets and booked profits. • Higher cut-off yields at the weekly T-Bill auction also weighed on sentiment. The cut-offs came at 5.39% for the 3M, 5.82% for the 6M and 6.09% for the 1Y T-Bills. The 10Y point closed the day 3 bps higher at 7.04% vs 7.01%. • Banking system liquidity remained at surplus of around INR 4.4 Tn. RBI conducted overnight VRRR auction for INR 0.75 Tn to absorb excess liquidity and it was fully subscribed at 5.24%.
