Listen to this article in summarized format
×
Unlock AI Briefing and Premium Content
What’s Included
- Exclusive Stories
- Daily ePaper Access
- Smart Market Tools
- Curated Investment Ideas
- Ad-lite Experience
Subscription
Subscription
ReutersThe benchmark 6.48% 2035 bond yield jumped to its highest level since April 2 to settle at 7.1313% versus Friday’s close of 7.0644%.
Brent crude futures surged to a two-week high of $112 a barrel in Asian trade, their highest level since May 5, driven by bleak prospects for peace in the Middle East after a drone attack on a nuclear power plant in the United Arab Emirates.
Indian government bonds reversed early gains as reports emerged that the central bank is considering a rate hike to curb the rupee’s sharp decline. The benchmark bond yield surged following the news, overshadowing positive global cues like falling oil prices and progress in US-Iran negotiations. Overnight index swap rates also jumped on the rate hike speculation.
Rising oil prices triggered a rout in global debt markets. The yield on the 10-year U.S. Treasury climbed to its highest level in a year at 4.6310% in Asian trade.
Indian bonds have increasingly tracked U.S. Treasury moves in recent years, as higher U.S. yields narrow the return premium on emerging-market debt, spur foreign outflows and pressure the rupee.
Live Events
The rupee also hit yet another all-time low of 96.3875 to a dollar on Monday, ending 0.4% lower, which added to the pain for Indian bond investors.
Bond yields are now already factoring in a rise in policy rates, Puneet Pal, Head-Fixed Income, PGIM India Mutual Fund said, adding that he expects policy rates to rise by 50-75 bps by the end of calendar year 2026.
<div data-size="[[300, 250], [600, 250], [600, 300]]" data-adsSlot="/7176/Economictimes/ET_News/ET_News_ROS/ET_News_ROS_MID1_INTL_300" data-…
Leave a Reply