More Stories

Informist, Thursday, Jul 25, 2024

MUMBAI – Government bond prices are seen opening steady on Friday as traders may avoid aggressive bets on caution ahead of the 350-bln-rupee gilt auction, dealers said.

Swap rates are likely to open steady as traders are likely to remain cautious ahead of the US personal consumption expenditure data for June, dealers said. Any sharp movement in US Treasury yields and crude oil prices may also lend cues to gilts and swaps.

The personal income and outlays for June are due on Friday. According to Dow Jones, the core personal consumption expenditure price index, which is the Fed's preferred gauge, is expected to rise 2.6% on year and 0.2% on month.

On Friday, the three-day call money rate may open near the Reserve Bank of India's repo rate of 6.50% because of the demand for funds from banks early in the day.

GOVERNMENT BONDS

Bond prices are seen opening steady as traders may avoid aggressive bets on caution ahead of the 350-bln-rupee gilt auction, dealers said. At the auction, the government will sell 120 bln rupees each of the 7.04%, 2029 bond and the 7.23%, 2039 bond and 110 bln rupees of the 7.34%, 2064 bond.

The yield on the 10-year benchmark 7.10%, 2034 bond is seen at 6.92-6.98% during the day. Today, the bond closed at 101.02 rupees, or 6.95% yield.

OIS RATES

Swap rates are likely to open steady as traders are likely to remain cautious ahead of the US personal consumption expenditure data for June. According to Dow Jones, the core personal consumption expenditure price index, which is the Fed's preferred gauge, is expected to rise 2.6% on year and 0.2% on month.

Traders expect the receiving momentum to continue as the odds of rate cuts in the US have increased to 100% from 96% a day ago. This could lead to a cut in the domestic policy rate by December, dealers said.

The swap rate in the one-year segment is seen at 6.65-6.80% and in the five-year segment at 6.18-6.35%. Today, the one-year swap rate settled at 6.68% and the five-year swap ended at 6.22%.

CALL

On Friday, the three-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. However, the rates may ease intraday owing to surplus liquidity in the banking system.

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 5.75%.

RBI AUCTION

--Govt to sell 350 bln rupees worth of three gilts 

LIQUIDITY

--Total net inflows of 12.88 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

--12.88 bln rupees as coupon on state government securities

--95.81 bln rupees from reversal of fourteen-day variable rate reverse repo

--38.60 bln rupees from reversal of two-day variable rate reverse repo

* Outflows

--Nil 

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Nishat Anjum

Edited by Saji George Titus

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.