By Dharamraj Dhutia
MUMBAI, April 25 (Reuters) –Indian government bond yields ended higher for the second consecutive trading session on Thursday as traders awaited the supply of bonds locally and key economic data in the United States ahead of its central bank monetary policy decision next week.
The benchmark 10-year yield IN071833G=CC ended at 7.2061%following its previous close at 7.1852%.
The yield rose 2 basis points (bps) on Wednesday, after falling an aggregate of 7 bps in the previous two sessions.
“There is some caution before debt supply tomorrow and markets remain worried over oil and interest rate outlook in the US,” said Nandan Pradhan, deputy general manager, treasury, at Mumbai-based Cosmos Bank.
New Delhi will sell bonds worth 320 billion rupees ($3.84 billion) on Friday, which includes 200 billion rupees of 7.10% 2034 paper, replacing the existing benchmark paper soon.
US Treasury yields have moved higher, with the 10-year yield around nearly 50 bps up so far in April, as expectations over timing as well as magnitude of rate cuts from the Federal Reserve continue to get revised.
Markets now await US growth data due later in the day, followed by personal consumption expenditures (PCE) data for March due after Indian market hours on Friday.
Both datasets would be a key influence on the Fed’s May 1 decision.
Hotter-than-expected inflation reading for March has already pushed back expectations of rate cuts, with investors now pricing in the possibility of around 42 bps of rate cuts by the end of this year, according to the CME’s FedWatch Tool.
Meanwhile, oil prices eased slightly, but the benchmark Brent crude contract remained around $87 per barrel, as supply worries persisted. Elevated crude prices could impact India’s retail inflation as the country is one of the largest importers of the commodity.
($1 = 83.3384 Indian rupee)
Reporting by Dharamraj Dhutia;
Editing by Sohini Goswami
