India's inflation data is due later in the week. Barclays estimates India's retail inflation in April eased below 5% due to a high base and some moderation in commodity prices. The RBI surprised the market with a pause on rates in April when a 25-bps hike was largely expected. However, Governor Shaktikanta Das had said that the decision to pause was only for the April meeting. Market participants expect the benchmark bond yield to trade in a range of 7%-7.10% this week. (Reporting by Bhakti Tambe; Editing by Savio D'Souza)
bhakti.rajendratambe.thomsonreuters.com@reuters.net Twiter: )) By Bhakti Tambe
MUMBAI, May 9 (Reuters) - Indian government bond yields
ended little changed on Tuesday due to the lack of fresh
triggers as market participants await U.S. inflation data for
further cues.
The 10-year benchmark 7.26% 2033 bond yield ended at 7.0445%, after closing at 7.0488% in the
previous session.
"The trading activity has been lacklustre as there are no
fresh cues. The market is now keenly watching for the U.S.
inflation print," said Debendra Kumar Dash, senior vice
president, treasury, at AU Small Finance Bank.
The U.S. Consumer Price Index data on Wednesday will show
whether price pressures continue to ease or remain at levels
that could make the U.S. Federal Reserve stick to its path of
interest rate hikes.
Last week, the Fed hiked rates by 25 basis points (bps) as
expected, but hinted a pause in its current rate hike cycle. Fed
funds futures are currently pricing in a 92% likelihood of
status quo in the June meeting and 8% odds of another 25 bps
hike. "If U.S. economic indicators, including the inflation print,
suggests improvement, then the market will start pricing rate
cuts in the U.S. as well as in India," Dash added.
The Fed fund rate currently stands at 5.00-5.25%, while the
Reserve Bank of India's (RBI) repo rate is at 6.50%.
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