• On Monday, the 10-year benchmark government bond (6.48% GS 2035) opened 3bp higher at 7.09% on higher oil prices and uptick in US Treasury yields. • Brent crude oil prices firmed up to over $110/barrel on fears of an escalation of hostilities in West Asia while the US Treasury yields rose to 4.63%, the highest level in over a year. • Over the day, the 10Y point stayed afloat as traders hit stop losses. However, some short covering was witnessed by the traders within the day. • Meanwhile, the INR fell sharply against the dollar breaching record low of 96.40/$ on higher crude oil prices, fresh escalation in the West Asia war and continuous foreign portfolio outflows from Indian equity markets. INR closed at 96.33/$, record low closing for the sixth consecutive day vs 95.96/$. • The 10Y yield closed 7bp higher at 7.13% vs 7.06%. The latest banking system liquidity stayed in surplus of ~INR 1424.73 Bln.
