More Stories

Informist, Wednesday, Apr. 29, 2026

MUMBAI – On Thursday, government bond prices and overnight indexed swap rates are seen tracking US Treasury yields after the decision of the US Federal Open Market Committee at 2330 IST Wednesday, dealers said. Dealers expect the US rate-setting panel to hold interest rates steady. Traders will track comments from US Federal Reserve Chair Jerome Powell, who is likely to deliver his final policy speech before his term ends next month. Fed fund futures are pricing in no change to the federal funds rate this week as inflation in the world's largest economy remains sticky, according to the CME FedWatch tool.

Developments related to the West Asia war and its impact on crude oil prices will also lend cues. Risk appetite may be lower Thursday ahead of the extended weekend. Indian financial markets are shut Friday for Maharashtra Day and Labour Day.

With no interest rate cues scheduled domestically, traders will also track the movement of the rupee against the dollar. Some traders expect the Reserve Bank of India's Monetary Policy Committee to opt for a quicker rate-hike cycle to limit the fall of the rupee against the dollar, as the West Asia conflict entered its third month this week, they said. With the state Assembly polls concluding, traders will also keep a watch if the Centre transmits the recent rise in crude oil prices to consumers by hiking retail prices of petrol and diesel. Other than the West Asia crisis, traders are tracking tariffs and trade deals amid scheduled talks between the US and India, they said.

"This is the first (US FOMC) policy after the war, I expect the commentary will be similar to what others (other central banks) have said, second-order effects and such," a dealer at a foreign bank said. "People are already expecting the Fed to sound vigilant, but for Powell, since it's his last (policy), will he give too much forward guidance? Or will he leave it to the next (Fed Chair), is something to be seen." Traders are also tracking the liquidity surplus, which has reduced considerably from its high of INR 5.50 trillion seen earlier this month. 

The gilt yield curve is seen flattening, while the OIS rate curve is steepening, dealers said. In the near term, some mutual funds may face month-end redemptions, pushing up overnight borrowing rates. In May, bond yields are seen rising as net supply increases and as traders begin pricing in higher inflation if the war continues, they said. By the end of May, traders also await the central bank's transfer of surplus dividend to the Centre. 

Traders are also on the watch for the likelihood of El Nino and its impact on monsoon this year and the subsequent impact on growth and inflation, they said.

On Thursday, the four-day call money rate is likely to open around 5.15%. Dealers expect the call rate to be 4.90-5.30% during the day, while the tri-party repo rate is expected to be in the range of 4.80–5.25%, as the liquidity surplus has reduced considerably from its high of INR 5.50 trillion seen earlier this month. 

GOVERNMENT BONDS

On Thursday, bond prices will track any development on the US-Iran peace talks and its impact on Brent crude oil prices, dealers said. Traders will also track the movement of overnight indexed swap rates, they said.

With Brent crude oil prices near $115 a barrel, which is seen as the new crucial level after the West Asia war, the yield on the 10-year benchmark is seen opening at 6.99%, dealers said. It is expected to go up to 7.02% before the weekly gilt auction. The auction result will lend further cues to the market, they said. The INR-290-billion gilt auction is seen sailing through. The yield on the benchmark 10-year 6.48%, 2035 bond is seen in a range of 6.90-7.05%. On Wednesday, the 10-year benchmark 6.48%, 2035 gilt ended at INR 96.50, or 6.99% yield. 

OIS RATES

On Thursday, traders will track crude oil prices and developments in the war in West Asia, now in its third month, dealers said. Traders will also watch US Treasury yields after the US Federal Open Market Committee's decision.

Thursday, the one-year swap rate is seen at 5.80-6.15% and the five-year swap at 6.30-6.70%. On Wednesday, the one-year swap rate ended at 5.99%, while the five-year swap ended at 6.62%.

CALL

On Thursday, the four-day call money rate is likely to open around 5.15%. Dealers expect the call rate to be at 4.90-5.30% during the day, while the tri-party repo rate is expected to be in the range of 4.80–5.25%, as the liquidity surplus has reduced considerably from its high of INR 5.50 trillion seen earlier this month. 

Rates in the overnight market will be higher Thursday due to demand for funds on the last trading day of the month, due to banks' reporting requirements and mutual funds facing redemptions. Dealers expect that if inflows from the government expenditure are transferred to the banking system in the first half of the day, then rates will be around 5.10-5.20% in the overnight market.

Indian financial markets are shut Friday for Maharashtra Day and Labour Day, and traders may increase their borrowing to provide for a four-day weekend. The weighted average call rate will be in the 5.15-5.25% band and that in the tri-party repo market is likely to be in the band of 5.05-5.15% Thursday, dealers said. Wednesday, the one-day call rate ended at 5.15%.

RBI AUCTION

--Govt to auction two gilts worth INR 290 billion

LIQUIDITY

Total net outflows of INR 81.06 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 170.00 billion as redemption of 91-day Treasury bills

--INR 66.00 billion as redemption of 182-day T-bills

--INR 22.17 billion as coupon on state bonds

--INR 17.92 billion as coupon on 7.33%, 2026 gilt

--INR 12.19 billion as coupon on floating rate bond 2034

* Outflows

--INR 218.33 billion as payment for 91-day T-bills

--INR 66.00 billion as payment for 182-day T-bills

--INR 85.00 billion as payment for 364-day T-bills

End 

US$1 = INR 94.84

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

Reported by Cassandra Carvalho

Edited by Vandana Hingorani

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. 2026. All rights reserved.