Yields closed lower • On Tuesday, the 10-year benchmark government bond (6.33% GS 2035) opened 2 bps lower at 6.50% supported by rising expectations of rate cuts in the upcoming RBI MPC policy after the RBI Governor’s dovish remarks on Monday. • The SDL auction amounting ~INR 250 Bn was conducted, and the cut offs were broadly in line with expectations. RBI offered 10Y Tamil Nadu at 7.14% and 30Y Tamil Nadu at 7.44%. • The latest banking system liquidity stands in surplus of ~INR 1281.23 Bn. The 10Y point ended 2 bps lower at 6.50% vs 6.52%. • Market participants now look forward to domestic GDP numbers due on Friday for further direction.
