India Money Market Outlook
Gilts, swaps seen taking cues Fri from US yields
This story was originally published at 21:31 IST on 24 October 2024
Register to read our real-time news.Informist, Thursday, Oct. 24, 2024
MUMBAI – Prices of government bonds and overnight indexed swap rates may take cues from the movement in US Treasury yields following the release of key economic data, dealers said. Bond prices may not be volatile ahead of the weekly gilt auction at 1030-1130 IST.
Data released after Indian market hours showed US initial jobless claims for the week ended Saturday rose 227,000, lower than the previous week and below estimates in a Dow Jones poll, while the US flash purchasing managers' index for October edged higher to 54.3 against 54.0 in September.
Both data points indicated a resilient US economy. Gilts and swap rates may also take cues from further movement in crude oil prices and geopolitical developments in West Asia, dealers said.
On Friday, the three-day call money rate may open around the RBI's repo rate of 6.50% because of the demand for funds from banks in early trade for reserve requirements.
GOVERNMENT BONDS
On Friday, government bond prices may take cues from the movement in US Treasury yields, dealers said. The impact on gilt prices will be limited ahead of the weekly gilt auction at 1030-1130 IST, they said.
The government will sell INR 220 billion of the 6.79%, 2034 bond and INR 100 billion of the 7.46%, 2073 bond through an auction at 1030-1130 IST on Friday. Demand is seen firm at the auction due to a lack of gilt supply next week. Traders are keen to pick up the 10-year gilt, which is expected to become the new benchmark soon, dealers said.
The yield on the 10-year benchmark 7.10%, 2034 bond is seen at 6.79-6.86% and on the 6.79%, 2034 bond at 6.76-6.82% on Friday. On Thursday, the 7.10% 2034 bond closed at INR 101.92, or 6.82% yield, while the 6.79%, 2034 bond closed at INR 100.07 or 6.78%.
OIS RATES
On Friday, OIS rates are seen taking cues from the movement of US Treasury yields and crude oil prices. Volatility may be limited due to a lack of significant domestic cues, dealers said.
The swap rate in the one-year segment is seen at 6.45-6.62% and in the five-year segment at 6.12-6.30%. On Thursday, the one-year swap rate ended at 6.54% and the five-year swap rate closed at 6.24%.
CALL
On Friday, the three-day call money rate may open around the RBI's repo rate of 6.50% because of the demand for funds from banks in early trade for reserve requirements. During the day, the call rate is seen in a range of 6.00-6.60%, dealers said. On Thursday, the one-day call rate ended at 6.65%.
RBI AUCTION
--Govt to auction two gilts worth INR 320 bln
LIQUIDITY
--Total net inflows of INR 22.48 billion. Calculation of flows does not take into account redemption of the standing deposit facility and scheduled variable rate repo and reverse repo.
* Inflows
--INR 22.48 billion on coupon on state bonds
* Outflows
--Nil
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Siddhi Chauhan
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.
To read more please subscribe
Share this Story:
