Indian Bond Yields Mirror Decline in US Peers

 Government Bond Yields in India Dip, Following Trend Set by US Counterparts

In the early hours of Friday's trading session, Indian government bond yields witnessed a decline, mirroring the movement seen in the United States bond market.

The benchmark yield, represented by IN071833G=CC, stood at 7.1186% as of 09:02 a.m. IST, marking a slight decrease from the previous day's close of 7.1321%.

This downward trend in Indian bond yields coincided with a similar easing in U.S. Treasury yields on Thursday. Investors awaited crucial inflation data, which holds significance for the Federal Reserve's strategy of maintaining higher interest rates for an extended period.

During the Asian trading hours, the 10-year U.S. Treasury yield, denoted by US10YT=RR, stood at 4.4590%.

The recent trajectory of bond yields, both in India and the United States, has been characterized by a decline, particularly since last week's release of April payroll data, which fell short of market expectations.

Market sentiment suggests an anticipation of two 25-basis-point cuts in interest rates by the Federal Reserve within this year, with the first cut anticipated in September, according to FEDWATCH data.

Meanwhile, policymakers in New Delhi are gearing up to raise 200 billion rupees through bond issuances throughout the day, reflecting ongoing efforts to manage government finances and liquidity.

Traders are also keeping a close eye on local inflation figures scheduled for release next week. Projections from a Reuters poll suggest that India's consumer price inflation is likely to have eased to 4.80% in April, marginally lower than March's rate. However, concerns linger over persistent food inflation, which has remained stubbornly high.