• On Thursday, the 10-year benchmark government bond (6.94% GS 2036) opened steady at 6.77% in absence of fresh cues. • Yields eased, tracking an intraday decline in crude oil prices to $87/bbl. • Further easing was supported by likely FPI and foreign bank purchases, although profit booking by some participants capped the gains. The 10Y point closed the day 2 bps lower at 6.76% vs 6.78%. • India's merchandise trade deficit widened more than expected to a six-month high ?of $31.98 Bn in July. • The latest banking system liquidity stayed in surplus of ~INR 3.43 Tn. RBI conducted overnight VRRR auction for INR 1 Tn to absorb the excess liquidity.
