Yields end the day higher • On Friday, the 10-year benchmark government bond (6.33% GS 2035) opened flat at 6.52%. Over the day, IGB 10Y bond yield stayed afloat on profit-booking. • The weekly gilt auction cut-off yield came almost in line with expectations; the cutoff was slightly lower than expected. RBI offered 6.68% GS 2040 at 6.9057% for INR 160 Bn and 6.90% GS 2065 at 7.3759% for INR 120 Bn. • The RBI Weekly Bulletin showed RBI purchased bonds worth INR 124.7 Bn in secondary market via Open Market Operations, confirming that purchases made by 'others' last week were done by the central bank itself. • India's Oct WPI inflation came at -1.21% YoY compared to 0.1% in Sep on the back of softening in food and manufactured product inflation. Meanwhile, Indian rupee ended weaker at 88.74/$ on dollar demand by importers. The 10Y point closed 1 bp higher at 6.53% vs 6.52%. • RBl conducted 3-day VRRR for INR 1000 Bn. The demand was subdued as INR 573.80 Bn was subscribed at 5.49%. The latest banking system liquidity stands in surplus of ~INR 2402.51 Bn.
