• On Friday, the benchmark 10-year government bond (6.48% GS 2035) opened 3 bps higher at 7.05%, tracking overnight hardening in 10Y UST yields. The 10Y UST yield breached 4.50% amid inflation concerns and softer demand at recent US Treasury auctions. • The INR fell sharply and touched all-time low of 96.14/$, amid elevated crude oil prices and inflation concerns. The INR recovered to close at 95.97/$, on likely RBI intervention, with DXY hovering around 99.2 levels • Negative sentiment persisted through the day with the 10Y IGB (6.48% GS 2035) rising to 7.09% amid a weaker INR and crude prices near $108/bbl, before closing at 7.06% as some participants likely covered short positions. • The cut offs for weekly IGB auction worth INR 320 Bn were broadly on expected lines. 6.36% GS 2031 came at 6.8779% and New GS 2066 at 7.71%. • The latest banking system liquidity stands in surplus of ~INR 2.17 Tn.
