• On Thursday, the 10Y benchmark (6.94% GS 2036) opened 2 bps higher at 7.07%, tracking the 10Y UST near 5%, after the Fed raised its key interest rate by 25 bps to 3.75%-4.00% in a unanimous decision, marking its first rate hike since 2023. • Over the day, the 10Y IGB traded in the range of 7.04%-7.08%, with yields initially touching 7.06% tracking intraday easing in crude prices, before moving back to 7.08% following the OMO sale cut-offs. • The cut-offs for the RBI’s INR 500 Bn OMO sales auction came weaker than market expectations. Later in the day, yields eased to 7.04%, tracking further moderation in crude prices and an intraday decline in 10Y UST yields to 4.97%, before closing the day flat at 7.05%. • Brent crude eased to around $102/bbl on reports of additional Saudi cargoes via Oman, though prices remained above $100/bbl amid Middle East conflict concerns. • Banking system liquidity remained at surplus of around INR 7.3 Tn. RBI conducted overnight VRRR auction for INR 3 Tn to absorb excess liquidity, accepting INR 2.4 Tn at 5.24%.
