India 10Y Yield Falls to 2-Month Low

The yield on India’s 10-Year G-Sec hovered around 6.8%, extending its decline to a two-month low as falling crude oil prices eased concerns over inflation and India's external balances. Brent crude fell 5% for a second consecutive session, taking its cumulative decline over four sessions to around 15%, after details emerged of an interim US-Iran peace agreement that would allow Iran to resume oil sales, extend a ceasefire announced in April by another 60 days. The decline in yields was further reinforced by strong foreign demand for domestic debt, with overseas investors purchasing more than $2 billion worth of Indian bonds over the last eight sessions following the RBI's June 5 measures to boost capital inflows. However, the move lower was limited by profit-taking after the recent rally and caution ahead of the Federal Reserve's policy decision, as investors await guidance from Chair Kevin Warsh on the US interest-rate outlook for 2026.

The yield on India’s 10-year G-Sec hovered around 6.8%, little changed from the previous session as investors balanced optimism over easing geopolitical risks against uncertainty surrounding the preliminary US-Iran peace agreement and fresh debt supply. Market participants also monitored a scheduled sale of INR 216 billion worth of state government bonds. Sentiment remained supported by a sharp drop in crude oil prices after US President Donald Trump announced a memorandum of understanding to end the conflict. Brent crude had fallen nearly 5% in the previous session to its lowest close since March 4, although prices edged higher in Asian trading as investors awaited further details of the agreement. Meanwhile, foreign investors have poured more than $1.75 billion into Indian bonds over the past seven sessions following the Reserve Bank of India's measures to attract dollar inflows, further underpinning demand for government debt.

The yield on India’s 10-year G-Sec fell to around 6.8%, extending last week’s decline and hovering near a two-month low as easing geopolitical tensions and a sharp drop in crude oil prices boosted demand for government debt. Sentiment improved after the US and Iran reached a preliminary agreement to end the conflict and reopen the Strait of Hormuz. The deal sparked a sharp decline in oil prices, with Brent crude falling 4.5% to $83.40 per barrel, its lowest level since March 10 and far below the conflict-era peak of $120. Yields were also pressured lower by recent RBI measures aimed at attracting foreign capital, supporting the rupee, and strengthening the country's external position. Foreign investors have purchased more than $1.6 billion worth of Indian bonds over the past six trading sessions, while markets are closely monitoring the potential inclusion of Indian government bonds in the Bloomberg Global Aggregate Index, a move that could drive additional foreign inflows.