• The 10-year benchmark government bond (6.48% GS 2035) opened 1 bp higher at 6.62%. • Over the day, the 10Y yield firmed up to 6.66%, driven by record state borrowing calendar for the Jan-Mar quarter. The sell-off continued after the RBI’s OMO INR 500 billion auction cut-off prices came below market expectations. • The weakness in INR due to fears of further delay in India-US trade deal, weighed on gilt prices, INR closed at 90.28/$. • However, value-buying was witnessed in the 10Y point by few market participants. The 10Y bond yield closed 2 bp higher at 6.63% vs 6.61%. • The latest banking system liquidity stands in surplus of ~INR 497.02 Bn. RBI conducted overnight VRR for INR 500 Bn and it was partially subscribed at 5.26%.
