HALISTER1: India Bond Yield vs Repo Spread Has Scope to Compress: Analysts

India Bond Yield vs Repo Spread Has Scope to Compress: Analysts

(Bloomberg) -- The spread between India’s bond yield and repo rate has scope to compress further in anticipation of more monetary easing and OMO purchases while global yields are increasingly turning negative, Yes Bank and Edelweiss Financial Services say.
  • Spread between India’s 10-year benchmark yield and central bank’s repo rate has narrowed to 67bps from 2016 high of 113bps
  • Compression could push 10-yr yield down toward 7% in Oct.- Dec, according to a note from Yes Bank
  • “When yields in a large part of the world have turned negative, India cannot trade above 7% for a long time,” Ajay Manglunia, Mumbai-based head of fixed income at Edelweiss Financial Services says
    • Spread between repo rate and 10-year yield is wide and will see some compression
  • 10-year yield up 1 bp to 7.17%; RBI’s repo rate at 6.5%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ajay Manglunia (Edelweiss Financial Services Ltd)

To de-activate this alert, click here

UUID: 7947283