Yields end the day higher • The 10-year benchmark government bond (6.33% GS 2035) opened steady at 6.53% on Monday. • Meanwhile, market participants continued to book profits ahead of tomorrow’s SDL auction where the states would raise less than indicated in the calendar. The uptick in US 10Y yields due to lower expectations of Fed rate cut in December weighed on yields. • The SDL auction is due tomorrow where 7 states will borrow INR 136Bn which is lower than the indicated amount of INR 214 Bn. Over the day, 10Y bond yield surged to 6.55% tracking the weakness in INR amid record high India’s trade deficit and lower bets of RBI rate cut. • Indian rupee ended weaker at INR 88.63/$.The 10Y point closed 1bp higher at 6.54% vs 6.53%.The latest banking system liquidity stands in surplus of ~INR 1808.82 Bn.
