Mecklai graph: India 10-yr bond yield moving higher
Published on Fri, Feb 10, 2012 at 13:05 | Source : Moneycontrol.com
Updated at Fri, Feb 10, 2012 at 16:03
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Mecklai graph: India 10-yr bond yield moving higher
Mecklai graph of the day - The yield on the 10 Yr G-sec has again started to rise after a sharp fall last month due to the OMOs conducted by RBI in order to increase liquidity in the market.
Mecklai graph of the day - India 10-yr yield moving higher
The yield on the 10 Yr G-sec has again started to rise after a sharp fall last month due to the OMOs conducted by RBI in order to increase liquidity in the market. The downside was also supported by significant Net FII inflows into the debt market earlier this year. However, recently, FIIs have been net sellers in the debt segment as the fundamentals of India have deteriorated significantly as observed amongst recent domestic economic data. Moreover, RBI's decision of not conducting OMOs in the current week has stimulated the up side rally in yields.
With today's IIP data coming below market expectations, focus will turn towards the release of headline WPI data next week. Expectations are for inflation to ease down to 6.70% as compared with prior monthly reading of 7.47%. Should the data come in line with market expectations, it would give room for the RBI to consider cutting benchmark interest rates, which in turn could support yields to inch lower.
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