The yield dropped 11 (bps) last week, its biggest move since the week ended Nov. 11.
The new 10-year 7.26% 2033 yield ended at 7.2799%, from 7.2415% at previous close.
"We expect the policy rates to be increased by 25 bps on
Wednesday and the monetary policy stance to change to neutral,"
said Puneet Pal, head of fixed income at PGIM India Mutual Fund.
"The 10-year benchmark bond yield will trade in the
7.10%-7.40% range till the fiscal year-end. The current yields
present a good opportunity to invest in fixed income across the
curve from a long-term perspective as we expect the RBI to start
cutting rates from next year."
The RBI will likely raise its key interest rate by 25 bps to
6.50% at its meeting before leaving it at that level for the
rest of the year, a Reuters poll of economists found.
The forecast is unchanged from a poll last month, with
predictions for a slowdown in GDP growth to 6.0% in the
financial year 2023/24 from an expected 6.7% this year.
Bond yields jumped after U.S. Treasury prices fell as data
showed job growth surged and services activity rebounded in
January, likely undermining the Fed's attempts to bring down
inflation.
The 10-year U.S. yield climbed 13 bps on Friday
and was last at 3.59%, as the market factored in another 50 bps
rate hike by the Fed.
Non-farm payrolls surged by 517,000 jobs last month, while
the non-manufacturing PMI increased to 55.2.
(Reporting by Dharamraj Dhutia; Editing by Sohini Goswami)
