India 10Y Yield Hits 15-Week Low

The yield on India’s 10-year G-Sec fell to around 6.71%, extending declines to a fifteen-week low as improved domestic liquidity and easing short-term funding costs boosted demand for government bonds. Recent Reserve Bank of India measures to attract foreign currency inflows are expected to inject billions of dollars into the banking system, reducing banks' reliance on higher-cost certificates of deposit and lowering funding costs. CD yields have fallen by up to 60 basis points over the past three weeks. Meanwhile, the spread between three-month Treasury bill yields and comparable state-run bank CDs narrowed to 140 basis points from over 200 basis points three months ago. Softer global yields also supported the bond market, with the US 10-year Treasury yield edging down to 4.37% ahead of Thursday's US June nonfarm payrolls report. Lower oil prices further improved sentiment, with Brent crude hovering near $72.50 per barrel, easing concerns over imported inflation.

The yield on India’s 10-year G-Sec fell to around 6.76%, extending declines to a fourteen-week low as strong foreign portfolio inflows and relatively stable crude oil prices supported demand for sovereign debt despite renewed tensions in the Middle East. Iran launched strikes on US military bases in Kuwait and Bahrain, but Brent crude remained near $71.9 per barrel after both sides agreed to halt hostilities and resume peace talks. Further weighing on yields, Goldman Sachs raised its 2026 India GDP growth forecast by 30 basis points to 6.8%, while lowering its headline inflation and current account deficit projections by 20 basis points each to 4.4% and 1.1% of GDP, respectively. Meanwhile, foreign investors have purchased a net INR 279 billion of Indian government bonds so far in June, supported by the RBI's June 5 measures to encourage capital inflows and growing expectations of India's eventual inclusion in Bloomberg's Global Aggregate Index.

The yield on India’s 10-Year G-Sec fell to around 6.7%, its lowest level in thirteen weeks as declining crude oil prices reduced inflation concerns and boosted demand for government securities. The benchmark yield extended its decline for a fourth straight session after Brent crude retreated to about $72 per barrel. Lower oil prices also supported foreign demand for Indian debt, with foreign portfolio investors purchasing a net INR 236 billion of government bonds in June, putting inflows on track for their strongest monthly total in two years. Additional downward pressure on yields came after RBI Governor Sanjay Malhotra said it was premature to discuss interest-rate hikes, leading investors to scale back expectations of tighter monetary policy. The decline in yields was somewhat limited by a scheduled INR 280 billion government debt auction, as market participants remained cautious ahead of fresh bond supply. Indian markets will be closed on June 26 and will resume trading on June 29.