It had dropped over 100 bps in three sessions to Monday as the collapse of a lender raised bets of an accommodative Fed. The 10-year U.S. yield was higher by 15 bps since Monday's close. Fed funds futures are now pricing in an over 80% chance for a 25-bps hike in March and 19% for rates being left unchanged. Meanwhile, India's February retail inflation was at 6.44%, sticky above the Reserve Bank of India's target band for the second straight month, cementing bets of another rate hike in April. The RBI raised the repo rate by 250 bps since last March. Besides, traders remained focused on the borrowing calendar for the April-September period. The government's borrowing during the quarter is likely to be between 55% and 58% of its gross borrowing target for next financial year, two government officials said on Wednesday. India aims to raise 15.43 trillion rupees ($187.04 billion) in the next financial year. ($1 = 82.4950 Indian rupees) (Reporting by Dharamraj Dhutia and Bhakti Tambe; Editing by Sohini Goswami)
By Dharamraj Dhutia and Bhakti Tambe
MUMBAI, March 15 (Reuters) - Indian government bond
yields ended little changed on Wednesday, as elevated inflation
shifted focus back on interest rate hikes by U.S. and Indian
central banks in the coming days.
The 10-year benchmark 7.26% 2032 bond yield ended at 7.3620%, after closing higher at 7.3841% on Tuesday.
"Factors like interest rates, inflation trajectory and the
start of the borrowing programme from April will guide markets
in the near term," said Prashant Pimple, chief investment
officer - fixed income at Baroda BNP Paribas Mutual Fund.
U.S. Treasury yields rose on Tuesday and Wednesday, after a
stubbornly high inflation reading in February raised bets of
policy hikes by the Federal Reserve.
The two-year U.S. yield, a closer indicator of rate
expectations, jumped over 25 basis points (bps) since Monday's
close.
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