• On Wednesday, the 10-year benchmark (6.94% GS 2036) opened 4 bps higher at 7.00% tracking the rise in 10Y UST yields to 4.80% levels and elevated Brent crude oil prices above $95. • Brent crude remained elevated amid US-Iran tensions, Hormuz disruption risks and Trump’s warning of further action. • The 10Y UST hardened to 4.81% amid oil-driven inflation fears and hawkish Fed repricing after Governor Barr signalled a rate hike if inflation fails to ease. • Over the day, the 10Y IGB eased to around 6.98% as some buying interest emerged at elevated yield levels. The 10Y point closed the day 2 bps higher at 6.98% vs 6.96%. • Banking system liquidity remained in surplus at ~INR 7.7 Tn. RBI conducted overnight VRRR auction for INR 5 Tn to absorb excess liquidity, accepting INR 4.6 Tn at 5.24%.
