India Bond Rally Extends as US Yields and Oil Retreat
Indian government bonds advanced for a fourth session as US Treasury yields and crude prices fell after the Democratic midterm victory.
Key takeaways
- India’s benchmark 2036 bond yield fell six basis points to 7.1258%.
- The US 10-year Treasury yield reached an eight-week low of 4.837%.
- Brent crude retreated to $94 a barrel from a pre-midterm peak near $120.
- A private-bank trader said next week’s inflation data will be key to the RBI rate outlook.
Indian government bonds rose for a fourth straight session on Thursday, following a decline in US Treasury yields and crude prices after the US midterm elections. The yield on India’s benchmark 6.94% 2036 bond fell six basis points to 7.1258% by 1 p.m. IST.
The US 10-year Treasury yield reached 4.837%, its lowest in eight weeks, before edging up slightly. It remained lower on the day. Brent crude fell to $94 a barrel from a pre-midterm peak near $120, according to Reuters.
Investors saw the Democrats’ election win as raising the prospect of political gridlock in Washington and limiting further spending measures. They also saw the result as potentially reducing the risk of disruptive policy changes and opening a path toward resolving the Iran war.
The Indian benchmark yield has fallen about 29 basis points over four sessions through Thursday. The market is watching whether the election result changes the course of the US-Iran war and the direction of crude prices, which could affect expectations for Reserve Bank of India policy.
A private-bank trader said next week’s inflation data would be important for judging the RBI’s rate outlook and whether the bond rally can continue. The RBI raised rates by 25 basis points at its October meeting and expects inflation to peak at 6% in the October-December quarter.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
