The market will be shut on Tuesday for a local holiday. "Bonds traded in narrow range, amid lack of fresh triggers and as traders are not interested in building heavy positions in (a) holiday-truncated week," said VRC Reddy, treasury head of Karur Vysya Bank.
Current levels are also not attracting real money buyers, while markets await U.S. non-farm payroll data and the Fed Chair's testimony, he said. Bond yields dipped earlier in the day, tracking a fall in U.S. Treasury yields on Friday, after hitting new highs earlier in the week, following comments from Federal Reserve officials that temporarily calmed fears around the direction of inflation and interest rates. The 10-year U.S. yield touched a four-month high of 4.09% on Thursday, but eased after likely short covering, traders said. It was last at 3.95%. Fed Chair Jerome Powell is scheduled to speak on Tuesday and Wednesday, providing an update on the central bank's policy outlook and future actions before crucial economic data.
Non-farm payroll data will be released on Friday, followed by February inflation data on March 14. These data points and Powell's comments will form the basis for expectations for Fed policy decisions later in the month.
Treasury yields have been rising on bets that the Fed may continue to hike rates for longer and at least thrice this year by 25 bps each.
Indian states on Monday raised 294.58 billion rupees ($3.61 billion) and have been borrowing heavily over the last few weeks.
The higher supply comes amid worries over higher inflation
and one more rate hike from the Reserve Bank of India in April.
($1 = 81.6875 Indian rupees)
(Reporting by Dharamraj Dhutia
Editing by Sonia Cheema)
