• On Tuesday, the 10-year benchmark government bond (6.48% GS 2035) opened flat at 7.14% as the Brent crude oil prices eased slightly below the key $110/barrel mark. • Over the day, 10Y yield dropped to 7.09% level on demand by traders in absence of any major escalation in the West Asia conflict. • Meanwhile, the SDL auction cut-off yield was largely in line with market expectations. RBI offered 10Y Rajasthan at 7.8295%, 10Y Tamil Nadu at 7.8082%. • INR fell sharply breaching fresh record low of 96.61/$ as crude oil prices remained higher amid the uncertainty around the peace negotiations between the US and Iran. INR closed at 96.53/$ vs 96.33/$. • The 10Y point ended 2bp lower at 7.11% vs 7.13%. The latest banking system liquidity stands in surplus of ~INR 1824.35 Bn.
