• On Friday, the 10-year benchmark government bond (6.48% GS 2035) opened 3bp lower at 6.89% following an overnight fall in Brent crude oil prices and lower US treasury yields. • Over the day, the 10Y point stayed within the range ahead of the India’s CPI inflation and weekly auction cut-off. Cut-off at the weekly IGB came in higher than market expectations for long term IGB, with 6.36% GS 2031 coming in at 6.500% and 7.71% GS 2066 at 7.6345%. • India CPI inflation picked up to 3.9% in May from 3.8% in April. The rise in the headline rate was driven by a jump in fuel inflation, following four separate hikes to pump prices last month as the government attempts to alleviate fiscal pressure. • The rupee settled at a one-week high against the dollar as Brent crude oil price tumbled to a three-month low on growing hopes of a peace deal between the US and Iran. INR ended at 95.1100/$ vs 95.76/$. • The 10Y point closed 3bps lower at 6.89% vs 6.92%. The latest banking system liquidity stands in surplus of ~INR 1589.87 Bn.
