India Bond Yields Seen Trading Within Narrow Range Ahead of Inflation Data
Indian government bonds may see a positive opening at the start of this week as investors wait for crucial inflation data from both India and the US. According to a trader at a private bank, the yield on the benchmark 6.94% 2036 bond is expected to trade in the 6.75% to 6.79% range.
The US Treasury yields fell on Friday after data showed that employers unexpectedly shed 23,000 jobs in July, against analyst expectations of a rise of 80,000 jobs. This prompted traders to cut odds of a Federal Reserve interest-rate hike in September to 42% from 55% before the data release and 67% last week.
Traders are focused on inflation prints from India and the US, both due on Wednesday, which will provide crucial guidance on the interest rate trajectory. A Reuters poll of 40 economists has forecast that India's retail inflation rate will rise to 4.50% in July from 4.38% in June.