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Informist, Tuesday, Jul 16, 2024

MUMBAI – Government bond prices are seen opening steady on Thursday amid a lack of domestic cues, dealers said. Money markets are shut on Wednesday on account of Muharram.

The market may take cues from US data like monthly sales for retail and food services in June and import and export price indices for last month. Both data points are due post market hours today.

Dow Jones expects overall retail sales to fall 0.4% on month, against a rise of 0.1% in the previous month. Import prices are seen falling 0.2%, against a 0.4% fall in the previous reading. Moreover, US Federal Reserve Governor Christopher Waller is set to speak on Wednesday, which may lend cues. 

Any sharp movement in US Treasury yields and crude oil prices may also lend cues to both gilts and swaps.

On Thursday, the one-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 trade. 

GOVERNMENT BONDS

Government bond prices are seen opening steady on Thursday amid a lack of domestic cues, dealers said. The yield on the 10-year benchmark 7.10%, 2034 bond is seen at 6.95-7.02% during the day. Today, the 7.10%, 2034 bond ended at 100.94 rupees, or 6.96% yield. 

OIS RATES

On Thursday, swap rates are seen opening steady amid a lack of domestic 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 ended at 6.70%, while the five-year swap rate ended at 6.28%. 

CALL

On Thursday, the one-day call money rate may open near the RBI's repo rate of 6.50% because of demand for funds from banks in early trades. However, the 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 two-day call rate ended at 5.75%. 

RBI AUCTION

--RBI to auction 91-day T-bills worth 80 bln rupees

--RBI to auction 182-day T-bills worth 60 bln rupees

--RBI to auction 364-day T-bills worth 60 bln rupees

LIQUIDITY

--Total net inflows of 179.92 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

--51.01 bln rupees as coupon on 6.54%, 2032 bond

--15.16 bln rupees as coupon for state government securities

--4.65 bln rupees as coupon for state government securities

--115.00 bln rupees as redemption of 182-day T-bills

--60.00 bln rupees as redemption of 364-day T-bills

* Outflows

--65.90 bln rupees as payments for state government securities

End

Reported by Vaishali Tyagi and M.C. Adhiinthran

Edited by Tanima Banerjee

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