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Informist, Wednesday, Jul 24, 2024

MUMBAI – Government bond prices and overnight indexed swaps are seen opening steady on Thursday, dealers said. The markets now await key data from the US, which may lend prominent cues to the market. 

The markets will assess US GDP advance estimates for Apr-Jun, scheduled to be released on Thursday. Swaps are also likely to take cues from speeches by various US Federal Reserve officials later this week. Any sharp movement in US Treasury yields and crude oil prices may also lend cues at the opening.

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

Bond prices are seen opening steady as the market may lack significant cues on the domestic front, dealers said. During the day traders are likely to trim bond holdings ahead of the weekly auction on Friday, which has a huge fresh supply, dealers said. The government will sell three dated securities worth 350 bln rupees.

Traders will now turn their focus to data from the US, due this week. The market may also take cues from comments by various US Federal Reserve officials this week, dealers said. On Thursday, US Apr-Jun GDP data is scheduled to be released, while data on personal income and outlays for June is due on Friday.

The yield on the 10-year benchmark 7.10%, 2034 bond is seen at 6.93-7.00% during the day. Today, the bond closed at 100.94 rupees, or 6.96% yield.

OIS RATES

Swap rates are seen opening steady due to lack of firm domestic cues. The market will focus on key economic data from the US for further guidance on rate cuts in that country. The market will assess US GDP advance estimates for Apr-Jun, scheduled to be released on Thursday. Swaps are also likely to take cues from speeches by various US Federal Reserve officials later this week.

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 6.69% and the five-year swap ended at 6.25%.

CALL

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. During the day, the call rate is seen in a range of 6.20-6.80%, dealers said. Today, the one-day call rate ended at 6.67%.

RBI AUCTION

--Nil

LIQUIDITY

--Total net inflows of 58.20 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

--132.00 bln rupees as redemption of 91-day T-bills 

--105.25 bln rupees as redemption of 182-day T-bills 

--61.49 bln rupees as redemption of 364-day T-bills 

--115.15 mln rupees as coupon on 2035 floating rate bond

--26.60 bln rupees as coupon on state government securities

* Outflows

--140.00 bln rupees as payment for 91-day T-bills 

--66.55 bln rupees as payment for 182-day T-bills 

--60.71 bln rupees as payment for 364-day T-bills 

End

Reported by Nishat Anjum

Edited by Avishek Dutta

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