• On Tuesday, the benchmark 10Y bond (6.94% GS 2036) opened steady at 7.17% and touched 7.185% tracking elevated global cues, with the 10Y UST yield hovering around 5.25% and Brent crude prices remaining firm near $107/bbl. • During the day 10Y point eased to 7.16% as buying interest emerged at elevated yield levels. However, market participants remained cautious ahead of the weekly SDL auction. • The cut offs for the weekly SDL auction came better than market expectations with BR 9Y coming at 7.88%, 25Y TN at 7.96% and 30Y MP at 7.95%. • The 10Y point closed 2 bps lower at 7.16% vs 7.18%. • Banking system liquidity remained in surplus at ~INR 4.79Tn. RBI conducted multiple VRRR auctions to absorb excess liquidity.
