• The 10-year benchmark government bond (6.48% GS 2035) opened 3bp higher at 6.90% on the back of elevated Brent prices and a rise in US Treasury yields amid caution ahead of the expected release of the Centre's borrowing calendar for Apr-Sept. • Over the day, the 10Y point elevated to 6.95%, its highest since Jul 25, 2024 on fears that the Centre would have to forgo a revenue of between INR 1-1.50 trln in FY27 following the cut in excise duty on petrol and diesel. • A slump in the rupee also weighed on bond prices. INR ended at $94.81/$ after dropping to a fresh record low of 94.84/$, weighed down by higher crude oil prices and weak risk sentiment on the back of the ongoing conflict in West Asia. • The SDL auction witnessed weaker demand, taking the cutoff yields higher than market expectations. RBI offered 12Y Rajasthan at 7.72%, 15Y Rajasthan at 7.99%, 15Y Haryana at 7.92%. • The 10Y point closed 7bp higher at 6.94% vs 6.87%. The latest banking system liquidity stands in surplus of ~INR 432 Bn.
