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Informist, Wednesday, Jun. 10, 2026

NEW DELHI – On Thursday, government bond prices and swap rates are likely to take cues from the movement in Brent crude oil prices amid developments related to the war in West Asia, dealers said. Brent crude inched up after US President Donald Trump Wednesday warned that Iran would have to "pay the price" as it has taken "too long" to reach a peace deal with the US.

Traders are also likely to track the movement of US Treasury yields after data showed CPI inflation in the US increased at its fastest pace in three years in May. However, core CPI inflation in May was lower than expectations at 0.2% on month, against the estimate of 0.3% in a poll by The Wall Street Journal.

Traders will also monitor development related to the inclusion of Indian government bonds on Bloomberg Index Services' flagship Global Aggregate Index after the Reserve Bank of India and the government Friday unveiled a slew of measures to attract foreign inflows, dealers said. Government sources said that such measures were intended to secure the inclusion. Bloomberg, which deferred its decision on the inclusion of Indian bonds in January, said it plans to provide the next update on the potential inclusion by mid-2026. Most traders expect the review this month.

Traders also await India's CPI inflation data for May, scheduled for Friday. Headline retail inflation is likely to have risen to a 16-month high of 4% in May, reaching the Reserve Bank of India's medium-term inflation target, according to the median in an Informist poll of 12 economists.

GOVERNMENT BONDS

On Thursday, government bond prices are likely to take cues from developments in the West Asia war and their impact on Brent crude oil prices, dealers said. The yield on the 10-year 6.48%, 2035 bond is seen opening higher on fears of further escalation in the West Asia war, dealers said.

It is expected to move in a range of 6.92-7.00% Thursday. If Brent crude oil prices surge past $100 per barrel on overnight escalation in the US-Iran war, the yield could breach the crucial 7.00% mark, dealers said.

On Wednesday, the 6.48%, 2035 bond ended at INR 96.90. Its yield settled at 6.9353%. The newer 10-year 6.94%, 2036 bond, which was the most-traded security of the day, ended at INR 99.97. Its yield settled at 6.9431%. 

OIS RATES

On Thursday, traders are likely to track the movement of US Treasury yields after data showed CPI inflation in the US hit a three-year high in May. Swap rates will also continue to track crude oil prices, dealers said. Swaps could decline if a peace deal between the US and Iran is announced, they added. 

The movement of the rupee against the dollar could also lend cues to swap rates. The one-year swap rate is seen at 5.90-6.20% and the five-year at 6.30-6.64%.

The one-year swap rate ended at 6.08% Wednesday. The five-year OIS rate ended at 6.48%.

CALL

On Thursday, the one-day interbank call money rate is likely to open above the RBI's repo rate of 5.25% on likely demand from primary dealerships and some banks in early trade, dealers said. 

Dealers expect the call rate to be in the 4.70–5.40% range. The tri-party repo rate is expected to trade in a 4.90–5.30% band. The weighted average call rate is expected to be around 5.25–5.30%, and the weighted average rate in the tri-party repo market is likely to be around 5.15-5.20%, they said. 

The one-day call rate ended at 5.20% Wednesday. The weighted average call rate was 5.28%.

RBI AUCTION

--Nil

LIQUIDITY

Total net outflows of INR 121.16 billion Thursday. 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 161.73 billion as redemtion of 91-day Treasury-bills

--INR 75.00 billion as redemption of 182-day T-bills

--INR 50.84 billion as redemption of 364-day T-bills

--INR 15.46 billion as coupon on state bonds

--INR 1.81 billion as coupon on 7.24%, 2033 green bond

* Outflows

--INR 253.00 billion as payment for 91-day T-bills

--INR 88.00 billion as payment for 182-day T-bills

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

End

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

Reported by Pratiksha and Meera Nair

Edited by Avishek Dutta

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