• On Tuesday, the 10-year benchmark (6.94% GS 2036) opened steady at 6.87%, in the absence of fresh cues, with Brent crude and 10Y UST broadly unchanged overnight. • On Monday, the US announced broader economic sanctions on Iran under “Operation Economic Outcast,” aimed at restricting Iran’s access to dollars and international financial channels. Over the day yields eased from 6.88% levels to 6.85% tracking crude below $90 and easing in 10Y UST to 4.67%. • Brent eased following reports that the US proposed lifting blockades and economic sanctions in exchange for Iran reopening the Strait of Hormuz and halting attacks by regional proxies. • The cut offs for the weekly SDL auction were broadly on expected lines with 10Y GJ coming at 7.47%, 13Y MH at 7.63% and 23Y MH at 7.70%. The INR appreciated and closed at 95.41/$ with DXY hovering around 99 levels. The 10Y point closed the day 2 bps lower at 6.85% vs 6.87% • Banking system liquidity remained in surplus at ~INR 3.6 Tn. RBI conducted 2 day VRRR auction for INR 1.75 Tn to absorb excess liquidity, accepting INR 0.98 Tn at 5.24%.
