• The 10-year benchmark government bond (6.48% GS 2035) opened 5bp higher at 6.78% due to an escalation in the West Asia war over the weekend and the subsequent rise in crude oil prices and US Treasury yields. • Over the day, the 10Y point elevated to 6.89% as stop losses triggered and Brent crude for May delivery hovered above $112/barrel. Overnight indexed swap rates also surged and Indian rupee depreciated to a record low of 94.01/$ amid risk aversion. • INR ended at fresh record low of 93.98/$ compared to Friday’s close of 93.71/$. • Meanwhile, the 10Y point reversed and yields fell after US Trump said the US and Iran have held productive talks over a resolution to hostilities in the Middle East. • The 10Y yield closed 11bp higher at 6.84% vs 6.73%. The latest banking system liquidity fell in deficit of ~INR 654 Bn on the back of advance tax and GST outflows.
