• The 10-year benchmark government bond (6.48% GS 2035) opened 1bp lower at 6.71%. • Over the day, 10Y point dropped as the RBI advanced its open market operations by a week to Thursday and Feb 5, from Feb 5 and Feb 12. However, the fall in yield was limited as traders retained their short bets ahead of the weekly gilt auction of INR 320 Bn due on Friday. • Meanwhile, the rupee erased its early rise and ended slightly lower against the dollar as banks persistently bought dollars on behalf of importers. INR closed at 96.12/$ vs 95.82/$. • The 10Y point closed 2bps lower at 6.70% vs 6.72%. The focus will be on tonight’s FOMC policy decision and tomorrow’s INR 500 Bn OMO auction result. • The latest banking system liquidity stayed in surplus of ~INR 836.87 Bn. RBI conducted 2-day VRR for INR 500 Bn and was partially subscribed at 5.26%.
