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Informist, Tuesday, Sep 24, 2024

MUMBAI – On Wednesday, government bond prices and overnight indexed swap rates may take cues from overnight movement in US yields, dealers said. Traders may take cues from the comments of US Federal Reserve Governor Michelle Bowman and Fed Governor Adriana Kugler who are scheduled to deliver remarks on the US economic outlook at separate events late Tuesday.

Traders await the US Personal Consumption Expenditures Index due on Friday. Any sharp movement in US Treasury yields and crude oil prices may also lend cues when the markets open. On Wednesday, the one-day call money rate may open near the Reserve Bank of India's repo rate due to demand for funds from banks in early trade to meet the reserve requirements.

BONDS

On Wednesday, gilts will take cues from the overnight movement of US Treasury yields, dealers said. A sharp swing in prices is unlikely as traders await the government borrowing calendars due later this week.

On the data front, traders await US non-farm payrolls data due Thursday for cues on the movement of US yields, dealers said.

Any uptick in yields may also prompt purchases by domestic banks, which are gearing up to meet a regulatory requirement to maintain larger buffers of liquid assets, such as government securities, from the next financial year starting Apr 1. The yield on the 10-year benchmark 7.10%, 2034 bond is seen at 6.74-6.80%. Today, the bond closed at 102.36 rupees, or 6.76% yield.

OIS RATES

OIS rates may open steady on Wednesday on lack of firm global and domestic cues, dealers said. The swap rate in the one-year segment is seen at 6.35-6.53% and in the five-year segment at 5.90-6.10%. Today, the one-year swap rate closed at 6.39% and the five-year rate at 6.02%.

CALL

On Wednesday, the one-day call money rate may open near the RBI's repo rate due to demand for funds from banks in early trade to meet the reserve requirements. During the day, the call rate is seen in a range of 6.00-6.60%, dealers said. Today, the one-day call money rate ended at 5.75%.

RBI AUCTION

--Nil

LIQUIDITY

--Total net outflows of 316.33 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

--4.98 bln rupees as coupon on 5.97%, 2025 gilt

--4.51 bln rupees as coupon on 6.01%, 2028 gilt

--13.18 bln rupees as coupon on state bonds

--5.00 bln rupees as redemption of state bonds 

* Outflows

--344 bln rupees as payment on state bonds

End

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

Reported by Srijita Bose and Cassandra Carvalho

Edited by Rajeev Pai

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