Informist, Wednesday, Sep 7, 2022

By Shubham Rana

NEW DELHI – Government bond prices ended on a mixed note today, with long-term bonds rising on hopes of India's sovereign debt being included in global bond indices, dealers said.

However, a surge in US Treasury yields on Tuesday and a recovery in crude oil prices from the day's lows today weighed on gilt prices.

The most-traded 6.54%, 2032 bond settled at 95.65 rupees, or 7.18% yield, against 95.69 rupees, or 7.18% on Monday. The 10-year benchmark 7.26%, 2032 bond ended at 100.93 rupees, or 7.13% yield, against 100.87 rupees, or 7.14%, the previous day.

Market appetite for long-term gilts remains firm, even in the face of adverse global cues, as investors are of the view that the announcement on listing of Indian gilts on JPMorgan's Global Bond Index Emerging Markets is imminent, with some placing bets of an announcement as early as this week, dealers said.

Morgan Stanley on Tuesday said in a note that it expects index provider JPMorgan to make an announcement in this regard as early as next week. Morgan Stanley also said that it expects the inclusion to drive in as much as $30 bln.

"The bond index inclusion news is keeping market sentiment so positive, in stark contrast to where the global markets are right now," said a dealer at a state-owned bank.

Traders stocked up on longer-dated securities, on hopes that long-term liquid bonds will be included in the JPMorgan index, dealers said. The 6.95%, 2061 bond gained the most today. The 2061 paper ended at 94.00 rupees, or 7.42% yield, against 93.36 rupees, or 7.47%, on Tuesday.

Even as investors preferred long-term bonds, which led to rise in prices, other bonds ended steady as traders avoided placing aggressive bets noting volatile global markets, dealers said.

US Treasury yields surged on Tuesday as strong economic data increased expectations of another sharp rate hike by the US Federal Reserve later this month.

The yield on the 10-year benchmark US Treasury note jumped up 13 basis points on Tuesday to 3.33%, the highest level since June, after an upbeat services industry report fuelled expectations of sharp interest rate hikes by the Fed. The yield on the 10-year note today topped 3.37% but came down to 3.31% by the end of Indian trading hours.

Crude oil prices rose today after Russia threatened to walk away from its energy supply contracts. Crude prices had fallen sharply on Tuesday as COVID-induced restrictions in China and expectations of further interest rate hikes led to concerns of a global economic recession and lower fuel demand growth.

The Brent crude contract for November delivery fell to $92.83 per barrel on Tuesday, after rising to nearly $97 per bbl on Monday. The contract was at $93.33 per bbl at end of Indian market hours today.

Bonds maturing in 10-14 years also appealed to investors due to their higher trade volumes. Uncertainty prevailed in bonds maturing under five years due to the volatility in the US interest rate outlook, which could affect the domestic rate view as well, dealers said.

"Just for short selling purposes I think a lot of traders prefer to stay in the 6.54%, 2032 bond, while the 7.26%, 2032 bond is unburdened by shorts due to its low outstanding," said a dealer at a private bank.

"The best bet is to stick to the liquid segments, while the real inflows will start once the (bond index inclusion) announcement comes," the dealer said.

According to data on the Reserve Bank of India's Negotiated Dealing System – Order Matching platform, the market-wide turnover was 420.30 bln rupees, compared with 420.70 bln rupees on Tuesday.

OUTLOOK

On Thursday, government bonds may open steady as traders keep to the sidelines due to lack of significant domestic cues.

Investor appetite for bonds remains firm on hope of India's sovereign debt being included in global bond indices, with a potential announcement as early as this month, dealers said.

Any movement in US Treasury yields and crude oil prices may also lend cues at open.

The yield on the 10-year 6.54%, 2032 bond is seen at 7.15-7.21%. The yield on the new 10-year 7.26%, 2032 bond is seen 7.10-7.16%.

India Gilts: Off lows as demand firm on hopes of bond index inclusion

NEW DELHI--1200 IST--Prices of government bonds recovered most losses, with the 10-year 7.26%, 2032 bond rising, as expectations of India's sovereign debt being included in global indices keeping appetite for gilts firm, dealers said.

Some investors are of the view that an announcement on listing of Indian gilts on JPMorgan's Global Bond Index Emerging Markets is imminent, with some placing bets of an announcement as early as this week, dealers said.

On Tuesday, Morgan Stanley said in a note that it expects index provider JP Morgan to make an announcement in this regard as early as next week. Morgan Stanley also said that it expects the inclusion to drive in as much as $30 bln.

"This report of an announcement being made in the next few days has given market another reason to stock up on gilts," a dealer at a private bank said. "As long as there are hopes of index inclusion, market will stay positive and keep buying gilts even as global cues turn adverse."

Investors preferred the 7.26%, 2032 bond with the bond most likely to be added first by index providers for inclusion, dealers said.

A fall in crude oil prices also supported gilt prices, dealers said. Crude prices fell sharply on Tuesday, after surging on Monday, as COVID-induced restrictions in China and expectations of further interest rate hikes led to concerns of a global economic recession and lower fuel demand growth. The Brent crude contract for November delivery fell to $92.83 per barrel on Tuesday, after rising to nearly $97 per bbl on Monday. The contract was at $91.52 per bbl today.

During the day, yield on the 10-year 6.54%, 2032 bond is seen at 7.16-7.21%. The yield on the new 10-year 7.26%, 2032 bond is seen at 7.11-7.17%.  (Shubham Rana)

India Gilts: Fall as US yields rise on sharp Fed rate hike bets

NEW DELHI--0925 IST--Prices of government bonds fell because of a surge in US Treasury yields on Tuesday as strong economic data increased expectations of another sharp rate hike by the US Federal Reserve later this month, dealers said.

However, the fall in bond prices was limited as crude oil prices fell sharply on Tuesday and in early trade today, dealers said.

"The fall in crude is offsetting the surge in US yields," a dealer at a state-owned bank said. "Moreover, domestic sentiment is upbeat so during the day prices can go up if global factors remain the same."

Yield on the 10-year benchmark US Treasury note jumped 13 basis points on Tuesday to 3.33%, the highest level since June, after an upbeat services industry report fuelled expectations of sharp interest rate hikes by the Fed.

Crude prices fell sharply on Tuesday, after surging on Monday, as COVID-induced restrictions in China and expectations of further interest rate hikes led to concerns of a global economic recession and lower fuel demand growth. The Brent crude contract for November delivery fell to $92.83 per barrel on Tuesday, after rising to nearly $97 per bbl on Monday.

During the day, yield on the 10-year 6.54%, 2032 bond is seen at 7.15-7.21%. The yield on the new 10-year 7.26%, 2032 bond is seen at 7.11-7.17%.  (Shubham Rana)

India Gilts: Seen down as US yields surge on sharp rate hike view

NEW DELHI - Prices of government bonds are seen falling today tracking a surge in US Treasury yields on Tuesday as expectations of a sharp rate hike by the Federal Reserve rose on the back of strong economic data in the US, dealers said. However, a sharp fall in crude oil prices may limit the extent of the fall in domestic bond prices.

Today, yield on the 10-year 6.54%, 2032 bond is seen at 7.15-7.23% as against 7.18% on Tuesday. The yield on the new 10-year 7.26%, 2032 bond is seen at 7.11-7.20% as against 7.14% earlier.

The yield on the 10-year benchmark US Treasury note jumped 13 basis points on Tuesday to 3.33%, the highest level since June, after an upbeat services industry report fuelled expectations of sharp interest rate hikes by the Fed.

According to CME FEDWatch tool, Fed funds futures' traders are pricing in a 70% chance of a three-quarter-percentage point increase as against 57% from a day before. The remaining traders expect a 50-bps hike.

A rise in US Treasury yields narrows the interest rate differential between the safe haven asset and emerging market debt, making the latter less appealing to foreign investors.

Crude prices fell sharply on Tuesday, after surging on Monday, as COVID-19 curbs in China and expectations of further interest rate hikes raised concern of a global economic recession and lower fuel demand growth. 

The Brent crude contract for November delivery fell to $92.83 per barrel on Tuesday, after rising to nearly $97 per bbl on Monday.

Back home, investor appetite for bonds remains firm on hope of India's sovereign debt being included in global bond indices, with a potential announcement as early as September, dealers said. This may also limit the fall in prices today, dealers said.  (Shubham Rana)

End

US$1 = 79.90 rupees

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

Edited by Ashish Shirke

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 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2022. All rights reserved.

Informist, Wednesday, Sep 7, 2022

By Shubham Rana

NEW DELHI – Government bond prices ended on a mixed note today, with long-term bonds rising on hopes of India's sovereign debt being included in global bond indices, dealers said.

However, a surge in US Treasury yields on Tuesday and a recovery in crude oil prices from the day's lows today weighed on gilt prices.

The most-traded 6.54%, 2032 bond settled at 95.65 rupees, or 7.18% yield, against 95.69 rupees, or 7.18% on Monday. The 10-year benchmark 7.26%, 2032 bond ended at 100.93 rupees, or 7.13% yield, against 100.87 rupees, or 7.14%, the previous day.

Market appetite for long-term gilts remains firm, even in the face of adverse global cues, as investors are of the view that the announcement on listing of Indian gilts on JPMorgan's Global Bond Index Emerging Markets is imminent, with some placing bets of an announcement as early as this week, dealers said.

Morgan Stanley on Tuesday said in a note that it expects index provider JPMorgan to make an announcement in this regard as early as next week. Morgan Stanley also said that it expects the inclusion to drive in as much as $30 bln.

"The bond index inclusion news is keeping market sentiment so positive, in stark contrast to where the global markets are right now," said a dealer at a state-owned bank.

Traders stocked up on longer-dated securities, on hopes that long-term liquid bonds will be included in the JPMorgan index, dealers said. The 6.95%, 2061 bond gained the most today. The 2061 paper ended at 94.00 rupees, or 7.42% yield, against 93.36 rupees, or 7.47%, on Tuesday.

Even as investors preferred long-term bonds, which led to rise in prices, other bonds ended steady as traders avoided placing aggressive bets noting volatile global markets, dealers said.

US Treasury yields surged on Tuesday as strong economic data increased expectations of another sharp rate hike by the US Federal Reserve later this month.

The yield on the 10-year benchmark US Treasury note jumped up 13 basis points on Tuesday to 3.33%, the highest level since June, after an upbeat services industry report fuelled expectations of sharp interest rate hikes by the Fed. The yield on the 10-year note today topped 3.37% but came down to 3.31% by the end of Indian trading hours.

Crude oil prices rose today after Russia threatened to walk away from its energy supply contracts. Crude prices had fallen sharply on Tuesday as COVID-induced restrictions in China and expectations of further interest rate hikes led to concerns of a global economic recession and lower fuel demand growth.

The Brent crude contract for November delivery fell to $92.83 per barrel on Tuesday, after rising to nearly $97 per bbl on Monday. The contract was at $93.33 per bbl at end of Indian market hours today.

Bonds maturing in 10-14 years also appealed to investors due to their higher trade volumes. Uncertainty prevailed in bonds maturing under five years due to the volatility in the US interest rate outlook, which could affect the domestic rate view as well, dealers said.

"Just for short selling purposes I think a lot of traders prefer to stay in the 6.54%, 2032 bond, while the 7.26%, 2032 bond is unburdened by shorts due to its low outstanding," said a dealer at a private bank.

"The best bet is to stick to the liquid segments, while the real inflows will start once the (bond index inclusion) announcement comes," the dealer said.

According to data on the Reserve Bank of India's Negotiated Dealing System – Order Matching platform, the market-wide turnover was 420.30 bln rupees, compared with 420.70 bln rupees on Tuesday.

OUTLOOK

On Thursday, government bonds may open steady as traders keep to the sidelines due to lack of significant domestic cues.

Investor appetite for bonds remains firm on hope of India's sovereign debt being included in global bond indices, with a potential announcement as early as this month, dealers said.

Any movement in US Treasury yields and crude oil prices may also lend cues at open.

The yield on the 10-year 6.54%, 2032 bond is seen at 7.15-7.21%. The yield on the new 10-year 7.26%, 2032 bond is seen 7.10-7.16%.

India Gilts: Off lows as demand firm on hopes of bond index inclusion

NEW DELHI--1200 IST--Prices of government bonds recovered most losses, with the 10-year 7.26%, 2032 bond rising, as expectations of India's sovereign debt being included in global indices keeping appetite for gilts firm, dealers said.

Some investors are of the view that an announcement on listing of Indian gilts on JPMorgan's Global Bond Index Emerging Markets is imminent, with some placing bets of an announcement as early as this week, dealers said.

On Tuesday, Morgan Stanley said in a note that it expects index provider JP Morgan to make an announcement in this regard as early as next week. Morgan Stanley also said that it expects the inclusion to drive in as much as $30 bln.

"This report of an announcement being made in the next few days has given market another reason to stock up on gilts," a dealer at a private bank said. "As long as there are hopes of index inclusion, market will stay positive and keep buying gilts even as global cues turn adverse."

Investors preferred the 7.26%, 2032 bond with the bond most likely to be added first by index providers for inclusion, dealers said.

A fall in crude oil prices also supported gilt prices, dealers said. Crude prices fell sharply on Tuesday, after surging on Monday, as COVID-induced restrictions in China and expectations of further interest rate hikes led to concerns of a global economic recession and lower fuel demand growth. The Brent crude contract for November delivery fell to $92.83 per barrel on Tuesday, after rising to nearly $97 per bbl on Monday. The contract was at $91.52 per bbl today.

During the day, yield on the 10-year 6.54%, 2032 bond is seen at 7.16-7.21%. The yield on the new 10-year 7.26%, 2032 bond is seen at 7.11-7.17%.  (Shubham Rana)

India Gilts: Fall as US yields rise on sharp Fed rate hike bets

NEW DELHI--0925 IST--Prices of government bonds fell because of a surge in US Treasury yields on Tuesday as strong economic data increased expectations of another sharp rate hike by the US Federal Reserve later this month, dealers said.

However, the fall in bond prices was limited as crude oil prices fell sharply on Tuesday and in early trade today, dealers said.

"The fall in crude is offsetting the surge in US yields," a dealer at a state-owned bank said. "Moreover, domestic sentiment is upbeat so during the day prices can go up if global factors remain the same."

Yield on the 10-year benchmark US Treasury note jumped 13 basis points on Tuesday to 3.33%, the highest level since June, after an upbeat services industry report fuelled expectations of sharp interest rate hikes by the Fed.

Crude prices fell sharply on Tuesday, after surging on Monday, as COVID-induced restrictions in China and expectations of further interest rate hikes led to concerns of a global economic recession and lower fuel demand growth. The Brent crude contract for November delivery fell to $92.83 per barrel on Tuesday, after rising to nearly $97 per bbl on Monday.

During the day, yield on the 10-year 6.54%, 2032 bond is seen at 7.15-7.21%. The yield on the new 10-year 7.26%, 2032 bond is seen at 7.11-7.17%.  (Shubham Rana)

India Gilts: Seen down as US yields surge on sharp rate hike view

NEW DELHI - Prices of government bonds are seen falling today tracking a surge in US Treasury yields on Tuesday as expectations of a sharp rate hike by the Federal Reserve rose on the back of strong economic data in the US, dealers said. However, a sharp fall in crude oil prices may limit the extent of the fall in domestic bond prices.

Today, yield on the 10-year 6.54%, 2032 bond is seen at 7.15-7.23% as against 7.18% on Tuesday. The yield on the new 10-year 7.26%, 2032 bond is seen at 7.11-7.20% as against 7.14% earlier.

The yield on the 10-year benchmark US Treasury note jumped 13 basis points on Tuesday to 3.33%, the highest level since June, after an upbeat services industry report fuelled expectations of sharp interest rate hikes by the Fed.

According to CME FEDWatch tool, Fed funds futures' traders are pricing in a 70% chance of a three-quarter-percentage point increase as against 57% from a day before. The remaining traders expect a 50-bps hike.

A rise in US Treasury yields narrows the interest rate differential between the safe haven asset and emerging market debt, making the latter less appealing to foreign investors.

Crude prices fell sharply on Tuesday, after surging on Monday, as COVID-19 curbs in China and expectations of further interest rate hikes raised concern of a global economic recession and lower fuel demand growth. 

The Brent crude contract for November delivery fell to $92.83 per barrel on Tuesday, after rising to nearly $97 per bbl on Monday.

Back home, investor appetite for bonds remains firm on hope of India's sovereign debt being included in global bond indices, with a potential announcement as early as September, dealers said. This may also limit the fall in prices today, dealers said.  (Shubham Rana)

End

US$1 = 79.90 rupees

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

Edited by Ashish Shirke

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 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2022. All rights reserved.