Indian bond yields fall as US inflation eases
India's 10-year bond yield slipped to 6.667% on February 16, thanks to softer US inflation numbers that have people betting on a Fed rate cut soon.
How does US inflation impact Indian bonds?
When US inflation comes in lower than expected, it often nudges global interest rates down.
That's exactly what happened: the US Consumer Price Index rose less than forecast, pushing Treasury yields lower and helping Indian bond yields fall too.
A recent government-RBI debt switch also helped by easing supply worries.
What to expect next?
Falling Indian yields could affect market sentiment, even with local supply pressures sticking around.
Kunal Sodhani from Shinhan Bank points out that more buybacks could cool things off further.
Now, everyone's watching for the next moves from the Fed and fresh US economic data to see where things head next.