• On Friday, the 10Y benchmark (6.94% GS 2036) opened 2 bps higher at 7.13%, tracking hardening in 10Y UST near 5.21% levels overnight. • 10Y UST yield hardened to 5.21%, its highest level since 2007, amid elevated Brent crude at $107/bbl, better than expected US jobs data and hawkish comments from Fed officials. • 10Y point traded in the range of 7.13-7.14% as participants-maintained caution ahead of the weekly IGB auction. The cut-offs at the weekly IGB auction came broadly on expected lines with 6.94% GS 2036 coming at 7.145%. • Post-auction, yields eased to around 7.11%, as some participants likely covered short positions. The 10Y point closed 1 bp higher at 7.12% vs 7.11%. • Banking system liquidity remained at surplus of around INR 4.27 Tn. RBI conducted 3-day VRRR auction for INR 1.5 Tn to absorb excess liquidity, accepting INR 0.9 Tn at 5.24%.
