• On Thursday, the 10-year benchmark government bond (6.33% GS 2035) opened 2bp lower at 6.58%. • Over the day, IGB 10y bond yields hardened to 6.63% on profit-booking. Also, the second OMO auction conducted by RBI worth INR 500Bn was fully subscribed and cut off price for 6.33 GS 2035 were slightly lower than expectations, keeping yields elevated. • Few participants expect an announcement of another OMO purchase auction of at least INR 250 Bn tomorrow with RBI Dec monetary policy meeting minutes. The 10Y point ended flat at 6.60%. • The latest banking system liquidity stands in deficit of ~INR 685.86 Bn. RBI conducted 4-day VRR for INR 750 Bn and witnessed tepid demand as ~INR 500 Bn was subscribed at 5.26%.
