HALISTER1: INSIDE INDIA: Bonds Fall; 10-Year Yield Floor at 6%: JPMorgan

INSIDE INDIA: Bonds Fall; 10-Year Yield Floor at 6%: JPMorgan

(Bloomberg) -- Yield on 10-year notes headed toward highest close in almost three weeks
  • Local bonds are reacting to surge in U.S. yields overnight, says Ajay Manglunia, head of fixed-income markets at Edelweiss Financial; no negative news domestically to drive bearish sentiment, he says
    • Markets looking forward to Feb. 1 budget and fiscal deficit target for FY18: Manglunia
  • Bond market doesn’t seem as fixated on fiscal deficit target this year, may be relatively forgiving for ‘small but not material’ breach, says Brijen Puri, head of markets at Indian unit of JPMorgan Chase
    • Difficult for 10-year govt bond yield to drop below 6%-6.25% given base case of 25bps rate cut
  • Yield on govt bond due September 2026 up 2bps to 6.47%; close at that level will be highest since Dec. 30
  • NOTE: U.S. 10-year bond yield rose 10 bps Wednesday
  • INR falls 0.2% to 68.22/USD, set to drop for second day
  • Read: JPMorgan calls for weaker Indian rupee to keep pace with China
  • Public banks were the biggest buyers of govt debt Wednesday, with net purchases of 50.3b rupees: CCIL data; foreign banks were biggest sellers at 42.6b rupees
  • Foreign investor holdings of rupee-denominated notes fell by 1.8b rupees Wednesday: NSDL data
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ajay Manglunia (Edelweiss Financial Services Ltd)
Brijen Puri (JPMorgan Chase Bank NA)

To de-activate this alert, click here

UUID: 7947283