India 10Y Yield Slips to 3-Week Low

The yield on India’s 10-year G-Sec fell to around 6.8%, marking a three-week low as demand for sovereign debt strengthened on expectations of moderating inflation, supported by softer crude prices. Sentiment has been supported by developments in global oil markets, where easing prices have reduced concerns over imported inflation for India. Traders also pointed to abundant system liquidity, which has kept short-term rates under pressure and encouraged flows into government securities. Market participants stated that liquidity conditions have become a key driver, with surplus cash in the banking system pushing investors toward longer-duration bonds. This dynamic has also spilled over into treasury bills, where market expectations point to further declines in upcoming auctions for 91-day, 182-day, and 364-day papers as demand remains firm.

The yield on India’s 10-year G-Sec rose to around 6.9%, extending gains from the previous week as a sharp rise in oil prices and renewed geopolitical tensions triggered broad-based selling in domestic bond markets. Sentiment weakened after Brent crude jumped over 7% to $102.2 per barrel, following the US move to begin a blockade of all maritime traffic entering and exiting Iranian ports after weekend talks failed to reach a peace deal, raising fears of renewed supply disruptions through the Strait of Hormuz. The selloff was further amplified by foreign portfolio outflows, with overseas investors continuing to trim exposure to local debt amid uncertainty over growth and inflation dynamics. Traders now expect the benchmark yield to trade in a 6.85%–7.00% range, as markets remain closely attuned to oil price movements, capital flows, and evolving geopolitical risks. Debt markets will be closed on April 14 and will resume trading the following day.

The yield on India’s 10-year G-Sec rose to around 6.97%, extending gains for another session, as investors reassessed inflation risks following a rebound in crude prices. Brent crude climbed toward $97 per barrel amid renewed doubts over the US-Iran ceasefire and potential disruptions in the Strait of Hormuz, prompting a reassessment of India’s import cost pressures. Traders noted that yields had eased in the previous session after the ceasefire news, but that move has since reversed as volatility in oil markets returned. Market participants also pointed to positioning ahead of the upcoming 10-year government security auction, with some fresh short positions building in anticipation of supply. The Reserve Bank of India is scheduled to conduct a government securities auction worth INR 34,000, which has added to cautious sentiment in the bond market as investors factor in near-term supply pressure.