India Money Market Outlook
Gilts, swaps seen opening steady Tue
This story was originally published at 20:57 IST on 15 July 2024
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MUMBAI – Government bond prices and overnight indexed swap rates may open steady on Tuesday amid a lack of domestic cues, dealers said. Comments by US Federal Reserve Chair Jerome Powell later today may lend direction to the US interest rate view.
Any sharp movement in US Treasury yields and crude oil prices may lend cues to both gilts and swaps.
On Tuesday, the two-day call money rate may open near the RBI's repo rate of 6.50% because of the demand for funds from banks in early trades. Financial markets will be closed on Wednesday on account of Muharram.
GOVERNMENT BONDS
On Tuesday, bond prices may open steady due to a lack of firm domestic and offshore cues, dealers said. Traders may avoid large bets ahead of the full Budget for 2024-25 (Apr-Mar) on Jul 23.
The yield on the 10-year benchmark 7.10%, 2034 bond is seen at 6.95-7.02% during the day. Today, the bond closed at 100.85 rupees, or 6.98% yield.
OIS RATES
Swap rates are seen opening steady on Tuesday amid a lack of domestic interest-rate cues, dealers said.
The swap rate in the one-year segment is seen at 6.65-6.80% and in the five-year segment at 6.27-6.42%. Today, the one-year swap rate settled at 6.74% and the five-year swap ended at 6.36%.
CALL
On Tuesday, the two-day call money rate may open near the RBI's repo rate of 6.50% because of the demand for funds from banks in early trades. Financial markets will be closed on Wednesday on account of Muharram.
Call money rates may ease intraday owing to prevailing surplus liquidity in the banking system. During the day, the call rate is seen in a range of 6.20-6.75%, dealers said. Today, the one-day call rate ended at 5.75%.
RBI AUCTION
--Six states to raise 65.90 bln rupees via bond sale.
LIQUIDITY
--Total net inflows of 8.67 bln rupees. Calculation of flows does not take into account redemption of the standing deposit facility and scheduled variable rate repo and reverse repos.
* Inflows
--4.13 bln rupees as coupon on 6.89%, 2025 bond
--4.54 bln rupees as coupon on state government securities
* Outflows
--Nil
End
Reported by M.C. Adhiinthran
Edited by Saji George Titus
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