India bonds gain as oil and Treasuries decline; auction remains key
TLT•Indian government bonds rose in early trade as oil prices and U.S. Treasury yields declined. The benchmark 2036 bond yield fell to 7.2667% from 7.2868%, ahead of a 360 billion rupee bond sale.
1. Bonds rise before auction
Indian government bonds rose in early trade on Friday as traders covered short positions after oil prices and U.S. Treasury yields declined. Gains were capped ahead of a weekly debt auction, with New Delhi set to raise 360 billion rupees ($3.72 billion) through bond sales.
2. Oil and rate outlook
Benchmark Brent prices eased slightly after U.S. President Donald Trump said Washington was engaged in productive discussions with Iran, but remained on track for weekly gains after settling 4% higher on Thursday. The Reserve Bank of India raised its repo rate by 25 basis points to 5.50% on Wednesday and shifted its stance to “calibrated tightening.” Most economists expect the terminal repo rate to reach at least 6.00%; Standard Chartered sees 6.25%, while Yes Bank anticipated another 25-basis-point increase in December and cumulative hikes of 75-100 basis points.
