Yields end the day higher • On Thursday, the 10-year benchmark government bond (6.33% GS 2035) opened 1 bp higher at 6.55% tracking the rise in US Treasury yields. • The US 10Y yield surged after Fed Powell pushed back against expectations for a December cut. The FOMC cut federal fund rate by 25bps to 3.75%-4.00% in line with market consensus. • Over the day, IGB 10y bond yields hardened tracking depreciation in INR. Indian rupee ended weaker at 88.70/$ on strong dollar after hawkish Fed Powell speech. • Meanwhile, over the day 10Y bond yields hardened on profit-booking amid signs that a trade deal between US-India could reduce tariffs on Indian exports, trimming bets of RBI rate cut in December. The 10Y point ended 3 bps higher at 6.57% vs 6.54%. • RBI conducted overnight VRR for INR 1000 Bn and it was fully subscribed at 5.51%. The latest banking system liquidity stands in surplus of ~INR 145.9 Bn.
