• The 10-year benchmark government bond (6.33% GS 2035) opened steady at 6.52% on Tuesday, ahead of SDL auction. • Over the day, yields eased tracking the fall in US Treasury yields and slightly better than expected SDL auction cut-off. • The SDL auction amounting INR 128 Bn witnessed a robust demand, RBI offered 9Y SDLs at 7.09%, in line with consensus. Meanwhile, 20-year bond cut-off was 7.31%, against consensus of 7.30%. • Crude oil prices declined amid rising trade tensions between the US and China, and developments related to the Israel-Hamas peace deal. Brent crude was trading around $62 per barrel, down approximately 2% which weighed on IGB 10Y yields. The 10Y point ended 1bp lower at 6.51% vs 6.52%. • The latest banking system liquidity stands in surplus of ~INR 1297 Bn.
