• The 10-year benchmark government bond (6.48% GS 2035) opened 3bp higher at 6.72% due to a surge in crude oil prices after an escalation in the armed conflict in West Asia over the weekend. • Over the day, the 10Y point stayed elevated due to the jump in Brent and the corresponding fall in the INR on concerns of a rise in both inflation and the current account deficit. • INR ended lower at 92.36/$ vs 91.74/$ on the back of a surge in crude oil prices amid oil importers dollar demand. • Meanwhile, the cut-off at the OMO INR 500 Bln auction was broadly in line with expectations and led to some recovery in bond prices. • Meanwhile, the 10Y point closed 3bp higher at 6.72% vs 6.69%. The latest banking system liquidity stands in surplus of ~INR 2417.78 Bn.
