More Stories

Informist, Saturday, Mar. 29, 2025

MUMBAI – On Wednesday, government bond prices and overnight indexed swap rates may take cues from the movement in US Treasury yields. Money markets are shut on Monday for Id-ul-Fitr and Tuesday for banks' annual closing of accounts. 

Any news on the US government's proposed tariffs and their potential impact on global trade may also impact gilts and swap rates. US President Donald Trump Wednesday said there would be "not too many" exceptions to his imposition of reciprocal tariffs on imports from US trade partners. The tariffs are set to go live on Wednesday.

Crude oil prices could also be a trigger for gilts if there is a significant movement in prices, dealers said. A sharp movement of the rupee against the dollar could also provide cues. 

On Wednesday, the one-day call money rate may open above the RBI's repo rate of 6.25% due to demand for funds from banks early in the day to meet their reserve requirements.

GOVERNMENT BONDS

On Wednesday, government bond prices may take cues from the movement in US Treasury yields which may react to the US Personal Consumption Expenditure inflation data, released post market hours Friday.

Traders are likely to retain their bets on a repo rate cut and stance change by the Reserve Bank of India's Monetary Policy Committee in April due to lack of significant interest rate cues until the next review on Apr. 7-9, dealers said. Dealers are also looking forward to states' borrowing plan for Apr-Jun.

The yield on the 10-year benchmark 6.79%, 2034 bond is seen at 6.55-6.63% during the day. On Friday, the 10-year gilt ended at INR 101.45, or 6.58%. 

OIS RATES

On Wednesday, swap rates may take cues from the overnight movement in US Treasury yields and the movement in government bond yields during the day, dealers said.

Short-term swaps will closely track the movement in the overnight Mumbai Interbank Offer Rate, with the RBI's proactive liquidity measures seen keeping the rate near the policy repo rate of 6.25%, dealers said. The overnight MIBOR on Thursday fell below the repo rate for the first time in over five months, and is expected to remain at or below the repo rate in April as liquidity conditions ease.

The one-year swap rate is seen at 6.00-6.12% and the five-year rate at 5.85-6.00%. On Friday, the one-year swap rate ended at 6.04% and the five-year swap rate closed at 5.91%.

CALL

On Wednesday, the one-day call money rate may open above the RBI's repo rate of 6.25% due to demand for funds from banks early in the day to meet their reserve requirements. During the day, the call rate is seen in a range of 5.75-6.40%, dealers said. On Saturday, the four-day call rate ended at 5.80%

RBI AUCTION 

--Nil

LIQUIDITY

--Total net inflows of INR 82.57 billion. The calculation of flows does not take into account the redemption of the standing deposit facility and scheduled variable rate repo and reverse repo operations.

* Inflows

--INR 14.49 billion as coupon on state bonds on Sunday

--INR 30.16 billion as coupon on 9.20%, 2030 gilt on Sunday

--INR 22.73 billion on redemption of state bonds on Monday

--INR 9.20 billion as coupon on state bonds on Tuesday

--INR 6.00 billion as coupon on state bonds on Wednesday

* Outflows

--INR 500.01 billion as reversal of five-day VRR tender on Wednesday

--INR 384.23 billion as reversal of five-day VRR tender on Wednesday

End

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

Reported by Srijita Bose

Edited by Tanima Banerjee

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. 2025. All rights reserved.