• The 10-year benchmark government bond (6.48% GS 2035) opened 6bps higher at 6.97% tracking the rise in Brent crude oil prices after the US and Iran failed to reach a peace deal. • Over the day, the 10Y point dropped on short-covering by traders. The India's CPI inflation for March which came in line with expectations also supported the bond market. • Meanwhile, the SDL auction witnessed better demand, taking the cutoff slightly higher than market expectations. RBI offered 11Y Kerala at 7.81%, 16Y Madhya Pradesh at 7.86%. • The rupee ended at a two-week low against the dollar as crude oil prices jumped and risk sentiment among investors soured after peace talks between the US and Iran failed and as the US Navy prepared a blockade of Iranian ports. INR ended at 93.37/$ vs Friday’s close of 92.72/$. • The 10Y yield closed 2bp higher at 6.93% vs 6.91%. The latest banking system liquidity stayed in surplus of ~INR 5547.96 Bln.
