• On Thursday, the 10Y benchmark (6.48 GS 2035) opened steady at 7.02% on caution ahead of MPC decision due tomorrow. • During the day, the 10Y point see-sawed within the tight range, tracking the move in Brent amid caution ahead of the MPC outcome. • Tomorrow, the RBI MPC is expected to keep the repo rate unchanged at 5.25% however may likely prepare market for rate hikes later in FY27. • INR dropped against the dollar for the third consecutive day and closed at a 2-week low on buying by importers amid uncertainty related to peace talks between the US and Iran. However, the fall in INR was limited due to likely RBI intervention. INR ended at 95.79/$ vs 95.70/$. • The 10Y point ended 3bps lower at 6.99% vs 7.02%. The latest system liquidity stands in surplus of ~INR 1706.44 Bn.
