Yields end the day better • The 10-year benchmark government bond (6.33% GS 2035) opened flat at 6.59% on Tuesday. • Over the day, 10Y yields hardened as market participants booked profits tracking the depreciation in INR. Indian rupee hit a fresh record low of 91.06/$, breaching the psychological level of 91/$ amid looming uncertainty over the India-US trade deal and lack of RBI’s active intervention in the FX market. Indian rupee ended at 91.03/$, marking its lowest-ever closing level. • The SDL auction worth ~INR 178.50 Bn witnessed tepid demand with tailish cut-off seen in some papers. RBI offered 10Y Tamil Nadu at 7.23%, 10Y Goa at 7.34%, 10Y Puducherry at 7.56%. • The 10Y point closed 2bp lower at 6.57% vs 6.59% on value-buying by market participants ahead of this week’s OMO auction. • The latest banking system liquidity stands in surplus of ~INR 1204.56 Bn.
