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Informist, Friday, Jul 26, 2024

MUMBAI – On Monday, government bond prices may open steady on lack of prominent cues, dealers said. The market sentiment may be hit as the Reserve Bank of India sold 27.15-bln-rupee gilts through open market operations in the week ended Jul 19, RBI data released after market hours showed, they added.

Gilts and swaps are not traded on Saturdays, while money markets are shut this Saturday. Swap rates may open steady on Monday as traders may avoid aggressive bets on lack of firm interest rate cues in India, dealers said. Any sharp movement in US Treasury yields and crude oil prices may also lend cues at the opening.

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

GOVERNMENT BONDS

On Monday, government bond prices may open steady on lack of prominent cues, dealers said. The market sentiment may be hit as RBI sold 27.15-bln-rupee gilts through open market operations in the week ended Jul 19, the data released by the central bank after market hours showed, dealers said. 

The losses may be limited as the quantum sold was not large, they added. In July, so far, the central bank has sold gilts worth 61.02 bln rupees. 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 101.09 rupees, or 6.94% yield.

OIS RATES

Swap rates may open steady on Monday on lack of firm interest rate cues in India, dealers said. During the day, rates are seen in a narrow range as traders are likely to remain cautious ahead of the Federal Open Market Committee meeting later in the week.

The swap rate in the one-year segment is seen at 6.60-6.80% and in the five-year segment at 6.20-6.35%. Today, the one-year swap rate settled at 6.70% and the five-year swap ended at 6.26%.

CALL

On Monday, 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. 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 three-day call rate ended at 5.75%.

RBI AUCTION

--Nil

LIQUIDITY

--Total net inflows of 362.91 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

--2.84 bln rupees as coupon on 7.10%, 2028 green bonds

--2.92 bln rupees as coupon on 7.29%, 2033 green bonds

--11.12 bln rupees as coupon on state government securities

--27.41 bln rupees as coupon on 8.40%, 2024 bond

--652.65 bln rupees as redemption of 8.40%, 2024 bond

--2.44 bln rupees as coupon on state government securities

--8.53 bln rupees as coupon on state government securities

--5.00 bln rupees as redemption of state government securities

* Outflows

--350.00 bln rupees as payment for gilts

End

Reported by Nishat Anjum

Edited by Aditya Sakorkar

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