• On Friday, the 10-year benchmark government bond (6.94% GS 2036) opened 1 bp lower at 6.75% tracking overnight decline in 10Y UST. • The 10Y UST eased to 4.65% after softer than expected PPI print and weaker jobs data. • Market participants-maintained caution ahead of weekly IGB auction. The cut offs for weekly IGB auction came broadly on expected lines. • Also, the WPI inflation eased marginally to 9.78% YoY in July from 9.87% in June. The 10Y point closed the day flat at 6.76%. • Banking system liquidity remained in surplus at ~INR 3.5 Tn. RBI conducted a 3-day VRRR auction for INR 1.5 Tn to absorb excess liquidity, accepting INR 0.8 Tn at 5.24%.
