Govt Bond Yield Falls in Tandem With US 10-Yr Treasury Yield: Key Driver?
By Malvika Gurung
Investing.com — The Indian continued declining at the open on Thursday, after closing 7 basis points lower at 7.44% on Tuesday’s session, following a steep fall in US bond yields.
The US 10-Year Treasury yield (NASDAQ:) eased to 4% levels on Thursday, at 4.036% while writing, as the retreated to 109.63, hovering near its lowest level in more than a month on growing expectations that the US Fed would go easy on the magnitude of rate hike at its upcoming policy meeting, on the back of a weakening economy, especially after the Bank of Canada announced a lower-than-expected interest rate hike.
As a result, India’s benchmark 10-year bond yield fell to 7.376 in the session after the Street observed a holiday on Wednesday. The rose to 82.2 against the greenback in the day after closing at 82.8/$1 on Tuesday.
Weak US data has raised prospects of a Fed pivot and this has resulted in risk on moves across assets, stated an IFA Global note.
A trader with a state-run bank said that such a major drop in U.S. yields within a matter of few days has instilled renewed confidence among bulls, adding that the trading range for the next few sessions could now be capped in a narrow 7.35%-7.40% band unless there is some major trigger on either side, as per a Reuters citing.
By Malvika Gurung
Investing.com — The Indian continued declining at the open on Thursday, after closing 7 basis points lower at 7.44% on Tuesday’s session, following a steep fall in US bond yields.
The US 10-Year Treasury yield (NASDAQ:) eased to 4% levels on Thursday, at 4.036% while writing, as the retreated to 109.63, hovering near its lowest level in more than a month on growing expectations that the US Fed would go easy on the magnitude of rate hike at its upcoming policy meeting, on the back of a weakening economy, especially after the Bank of Canada announced a lower-than-expected interest rate hike.
As a result, India’s benchmark 10-year bond yield fell to 7.376 in the session after the Street observed a holiday on Wednesday. The rose to 82.2 against the greenback in the day after closing at 82.8/$1 on Tuesday.
Weak US data has raised prospects of a Fed pivot and this has resulted in risk on moves across assets, stated an IFA Global note.
A trader with a state-run bank said that such a major drop in U.S. yields within a matter of few days has instilled renewed confidence among bulls, adding that the trading range for the next few sessions could now be capped in a narrow 7.35%-7.40% band unless there is some major trigger on either side, as per a Reuters citing.