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Informist, Thursday, Nov. 14, 2024

MUMBAI – Money markets are shut Friday on account of Guru Nanak Jayanti. On Saturday, the two-day call money rate may open below the Reserve Bank of India's repo rate of 6.50% due to low demand for funds as banks have already met regulatory requirements on Thursday, dealers said. As is usually the case on Saturdays, volumes are expected to be low.

During the day, the call rate is seen in a range of 6.00-6.60%, dealers said. On Thursday, the 4-day call rate ended at 6.25%.

GOVERNMENT BONDS

Gilts are not traded on Saturday. On Monday, prices of government bonds will take cues on movement in US yields after a series of interest rate cues over the long weekend, dealers said.

In addition to weekly unemployment claims data later Thursday, US retail sales for October are scheduled for release Friday. Before that, US Federal Reserve Chair Jerome Powell will speak, which could lend cues on the interest rate trajectory in the world's largest economy. 

The movement of crude oil prices may also affect gilts. On Monday, the government will switch INR 200 billion worth of eight bonds with seven gilts at 1030-1130 IST.

The yield on the 10-year benchmark 7.10%, 2034 bond is seen at 6.82-6.90% on Monday. The yield on the 6.79%, 2034 bond is seen at 6.79-6.86%. On Thursday, the 7.10%, 2034 bond closed at INR 101.60, or 6.86% yield, and the 6.79%, 2034 bond ended at INR 99.71, or 6.83% yield.

OIS RATES

Swap rates are not traded on Saturday. On Monday, OIS rates may take cues from a speech by US Federal Reserve Chair Jerome Powell and US retail sales data for October to be released on Friday.

The movement of US Treasury yields and crude oil prices will also be closely watched, dealers said. The swap rate in the one-year segment is seen at 6.54-6.60% and in the five-year segment at 6.30-6.36%. On Thursday, the one-year swap rate closed at 6.57% and the five-year swap closed at 6.33%. 

RBI AUCTION

--Nil

LIQUIDITY

--Total net inflows of INR 212.40 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 140.47 billion on redemption of 91-day Treasury bills on Friday

--INR 6.59 billion as coupon on state bonds on Friday

--INR 18.30 billion as coupon on 5.74%, 2026 bond on Friday

--INR 40.57 billion as coupon on 6.79%, 2027 gilt on Friday

--INR 6.47 billion as coupon on state bonds on Saturday

* Outflows

--Nil

End

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

Reported by Srijita Bose

Edited by Tanima Banerjee

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