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Informist, Thursday, Nov. 27, 2025

MUMBAI – Government bond prices and overnight indexed swap rates are likely to open steady before India's GDP data for the September quarter, which is scheduled to be released at 1600 IST Friday, dealers said. Global cues may be limited as US Treasuries are not being traded Thursday for Thanksgiving.

Trading activity Friday may be limited as traders refrain from taking aggressive positions ahead of the GDP data. Traders' outlook on the domestic rate trajectory hinges on the GDP print ahead of the Reserve Bank of India's Monetary Policy Committee meeting next week. Bets of a rate cut at the meeting have gained momentum after RBI Governor Sanjay Malhotra Monday said the latest economic data had increased the scope for a cut.

India's GDP growth rate likely fell to a three-quarter low of 7.2% in the September quarter, according to the median of an Informist poll of economists. Traders largely expect a print of around 7.2%, higher than the RBI's projection of 7.0%. Some traders have priced in a higher print because RBI officials had said at the previous policy meeting that while Jul-Sept growth may be strong, the growth trajectory from the December quarter onwards could weaken due to external risks, dealers said.

A growth rate near 8.0% may weigh on rate-cut expectations whereas a reading closer to 7.0% will fuel rate-cut bets in December and beyond, dealers said.

Traders will also track geopolitical developments Friday. The lack of an announcement of an India-US trade deal so far may increase bets of a rate cut next week, dealers said. Several traders were expecting the deal by the end of the month. The RBI's rate-setting panel, at its October meeting, had flagged concerns of risks to economic growth due to tariffs. The rupee's movement against the dollar will also be closely tracked, along with crude oil prices.

On Friday, the three-day call money rate may open near the RBI's repo rate due to fortnightly reporting Friday requirements and likely payments to Deposit Insurance and Credit Guarantee Corp. During the day, the three-day call money rate is seen in a range of 4.85-5.50%, dealers said. 

GOVERNMENT BONDS

On Friday, government bond prices may open steady on caution ahead of key economic data and the gilts auction of INR 320 billion. Traders will also look out for bond purchases of around INR 120 billion by the Deposit Insurance and Credit Guarantee Corp., a wholly-owned subsidiary of the RBI. Traders expect the institution to bid for the 6.28%, 2032 gilt at Friday's auction. The RBI arm insures bank deposits up to INR 500,000, and the premium for the first half of the financial year will be paid by the last working day of November. The institution usually invests this premium in gilts, especially in the 10-year and 15-year segments.

The 10-year benchmark 6.48%, 2035 bond is seen in a range of 6.40-6.52% Friday. The yield on the 6.33%, 2035 bond is seen at 6.45-6.55%. Thursday, the 10-year benchmark 6.48%, 2035 gilt closed at INR 100.11, or 6.46% yield, while the 6.33%, 2035 bond ended at INR 98.75, or 6.51% yield.

OIS RATES
Swap rates are expected to open steady Friday on caution before the release of India's GDP data for the September quarter at 1600 IST. Traders will also track the overnight Mumbai Interbank Outright Rate and crude oil prices for cues, dealers said. The one-year swap rate is seen at 5.38-5.50% and the five-year rate is seen at 5.66-5.75%. On Thursday, the one-year swap rate ended at 5.43% while the five-year swap rate closed at 5.71%.

CALL

On Friday, the three-day call money rate may open near the RBI's repo rate due to fortnightly reporting Friday requirements and likely payments to the Deposit Insurance and Credit Guarantee Corp. During the day, the three-day call money rate is seen in a range of 4.85-5.50%, dealers said. The one-day call rate ended at 5.00% Thursday.

RBI AUCTION

--Govt to auction four gilts worth INR 320 billion

LIQUIDITY

Total net inflows of INR 171.11 billion. The calculation of flows does not take into account redemption of the standing deposit facility and scheduled variable rate repo and variable rate reverse repo operations.

* Inflows

--INR 123.00 billion as redemption of 91-day Treasury bills

--INR 27.35 billion as coupon on state bonds

--INR 20.75 billion as coupon on 6.62%, 2051 gilt

* Outflows

--INR 163.63 billion as reversal of seven-day variable rate repo tender

End

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

Reported by Cassandra Carvalho

Edited by Rajeev Pai

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