Macro and Government Bond Commentary: Yields reverse early downside with weak SDL results, RBI governor’s comments • The 10Y benchmark (6.33 GS 2035) opened mildly higher tracking a rise in treasury yields overnight. This upside in yields did not sustain and saw ranged moves with a slightly downward bias until early in the afternoon. The SDL auction results were said to be worse than expected, with comments from RBI governor Malhotra (reported) also perceived to be cautious. Governor Malhotra said that a neutral stance gives the central bank the flexibility to move both ways, and inflation trajectory would be more important than a single number. Lastly, optimism on growth based on recent consumer surveys were also noted. The 10Y yield reversed early downside to close trade at 6.31%
