Mumbai: The results of 10-year 10-year Indian bonds reached a two-year high on Monday, tracking uptick in US results and sustainable rising in global crude oil prices that have increased expectations of rising interest rates by Bank of India (RBI) reserves.
The US Treasury yield rose on Friday and a higher stay in Asian trade as a group of consumer and manufacturing activities were seen as not enough to thwart the policy path of tightening the Federal Reserve.
“It seems that the market has prepared itself for the current increase.
Reversing the repo increase in February and April for the Repo too,” said Harish Agarwal, a fixed income trader in the first bank Rand.
Benchmark Benchmark Lathing Image 10-year rose 6 basis points from Friday nearly 6.64%, the highest since January 22, 2020.
The RBI has held the key repo level at a low record since the mid 2020 but has begun to reduce the secondary market bond purchases and withdrawal liquidity through auction Short term repurchase when starting policy normalization.
Oil prices rise on Monday because the supply of investors will remain tight in the middle of the output detained by the main producers with global demand which is not lying by the omicron coronavirus variant.
The RBI has projected inflation to remain high in the near future but a sustainable increase in global crude oil prices threatened to keep retail prices higher for longer and encourage inflation above the range of 2% -6% mandated.
The inconvenience of the central bank with the results of a proven increase but traders doubt the RBI will target a certain level or aggressively intervene to stop outgoing results.
“In the past nine weeks, the RBI has cumulatively sold bonds worth 210 billion rupees.
This is together with Devolvement (forcing the guarantor of emissions to auction to buy debt) in a recent auction show that the RBI is trying to close the results,” HDFC wrote Banks in their weekly records.
Traders will now wait for the details of the debt sales of RS 24,000 Crore this week ($ 3.23 billion) and the auction results of the 10,000 Crore RS debt switch today for short-term instructions.
“I think the next resistance is at 6.65%, don’t think it must be higher than here,” Agarwal said.