• On Tuesday, the 10-year benchmark government bond (6.94% GS 2036) opened 2 bps higher at 6.83%, tracking elevated Brent crude prices above $90/bbl and higher 10Y UST yields. • The 10Y UST hardened to 4.73% amid persistent inflation concerns and ahead of the FOMC minutes release on Wednesday. • Brent crude continued to trade above $90/bbl as the 60 day US-Iran ceasefire expired without an extension, raising concerns over further escalation and regional supply disruptions. • The 10Y IGB touched 6.85% ahead of the weekly SDL auction. The cut offs came broadly on expected lines with 10Y Assam coming at 7.595%, 15Y Bihar at 7.65% and 20Y Uttar Pradesh at 7.66%. The 10Y point closed the day 2 bps up 6.83% vs 6.81%. • Banking system liquidity remained in surplus at ~INR 3.6 Tn. RBI conducted multiple VRRR auctions to absorb excess liquidity.
