More Stories

Informist, Thursday, Dec. 12, 2024

MUMBAI – Government bond prices are expected to open steady Friday before the weekly gilt auction, dealers said. The government will sell INR 220 billion of the 6.79%, 2034 bond, INR 50 billion of a new 30-year, 2054 green bond, and INR 100 billion of the 7.09%, 2074 bond at 1030-1130 IST.

The auction cut-off prices may lend further cues to gilts. Traders expect demand to be robust after CPI inflation in India in November was in line with their expectations, falling to 5.48% from 6.21% in October.

Overnight indexed swap rates may take cues from the overnight movement in US Treasury yields after the release of key US data, dealers said. Initial weekly unemployment claims in the US rose to 242,000 in the week ended Dec. 7, against 220,000 estimated by Dow Jones. However, producer prices rose 0.4% on month in November, from 0.3% in October, marginally more than expected. Both US data points were released after Indian market hours.

On Friday, the three-day call money rate may open near the Reserve Bank of India's marginal standing facility rate of 6.75% due to demand for funds from banks.

GOVERNMENT BONDS

Gilts may open steady on caution ahead of the INR 370-billion gilt auction. Traders may take cues from auction results, with demand expected to be robust on increasing rate-cut bets in February, dealers said.

The overnight movement in US yields after the weekly unemployment claims data and US Producer Price Index at 1900 IST on Thursday may also lend gilt prices cues at the open, dealers said. Geopolitical developments and crude price movements may also lend cues.

The yield on the 10-year benchmark 6.79%, 2034 bond is seen at 6.70-6.77% Friday. On Thursday, the 2034 gilt settled at INR 100.35, or 6.74% yield.

OIS RATES

On Friday, swap rates will take cues from the overnight movement in US yields, dealers said. Short-term swap rates may ease slightly in a delayed reaction to India's CPI inflation print for November, which was slightly lower than the 5.6% estimated in an Informist poll.

The swap rate in the one-year segment is seen at 6.30-6.50% and in the five-year segment at 5.90-6.10%. On Thursday, the one-year swap rate ended at 6.41% and the five-year swap rate closed at 6.04%.

CALL

On Friday, the three-day call money rate may open near the RBI's marginal standing facility rate of 6.75% due to demand for funds from banks. During the day, the call rate is seen in a range of 6.00-6.80%, dealers said. On Thursday, the one-day call ended at 5.75%.

RBI AUCTION

--Govt to auction three gilts worth INR 370 billion

--RBI to conduct 14-day variable rate repo auction for INR 750 billion

LIQUIDITY

--Total net inflows of INR 8.90 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 8.90 billion as coupon on state bonds

--INR 24.76 billion on redemption of 14-day variable reverse repo tender

* Outflows

--INR 250.05 billion as reversal of two-day variable rate repo tender

End

Reported by Vidhushi RajPurohit

Edited by Rajeev Pai

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.