More Stories

Informist, Saturday, May 2, 2026

MUMBAI – Bond and overnight indexed swap rates are expected to track  developments in the West Asia war over the extended weekend and their impact on Brent crude oil prices, dealers said. Traders will also track the movement of the rupee, they said. 

Domestically, traders fear the Centre may raise petrol and diesel prices to help oil marketing companies, which are making losses on retail sales as crude oil prices have soared following the outbreak of the war, dealers said. If pump prices increase, CPI inflation is expected to rise towards the upper end of the RBI's tolerance band of 2-6% later in the financial year 2026-27 (Apr-Mar). Swap rates have already priced in several repo rate hikes in India in FY27 and beyond.

GOVERNMENT BONDS

On Monday, bond prices will track developments in West Asia and their impact on crude oil prices, dealers said. Traders will also track the movement of overnight indexed swap rates and the rupee, they said.

Brent crude oil prices cooled Thursday at the close of Indian gilt market hours but still remained above the key level of $110 per barrel, which is likely to weigh on bond prices, dealers said. The yield on the 10-year benchmark is seen opening at 7.01% Monday, they said. It is expected to rise above 7.05% if the US-Iran war escalates and crude prices shoot up to $120 per barrel over the weekend. The yield on the 10-year benchmark 6.48%, 2035 bond is seen in the range of 6.98-7.05%. Thursday, the bond had ended at INR 96.35, or 7.01% yield.

OIS RATES

Over the long weekend, traders will track crude oil prices and developments in the war in West Asia, now in its third month, dealers said. They will also track the liquidity surplus, which has reduced considerably from the high of INR 5.50 trillion seen in April. Monday, the one-year swap rate is seen at 5.80-6.15% and the five-year swap at 6.30-6.70%. Thursday, the one-year swap rate ended at 6.00% and the five-year swap rate at 6.61%.

CALL

On Monday, the one-day call money rate is likely to open around 5.15% on early demand for funds from primary dealerships and some banks, dealers said. They expect the call rate to move between 4.80% and 5.25% during the day and the tri-party repo rate to be in the range of 4.60–5.20% on the back of ample surplus liquidity in the banking system with inflows of INR 1 trillion–INR 1.5 trillion for payments of salaries and pensions expected, they said.

RBI AUCTION

--Nil

LIQUIDITY

Total net outflows of INR 275.3 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 5.47 billion as coupon on state bonds on Sunday

--INR 9.23 billion as coupon on state bonds on Monday

* Outflows

--INR 290.00 billion as payment for gilts 

End

US$1 = INR 94.91

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

Reported by Kabir Sharma and Durgesh Nandan

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. 2026. All rights reserved.