Indian bond yields rise with oil near $100 amid geopolitics
Indian bond yields rose on Wednesday after global crude oil prices shot up to nearly $100 a barrel.
This rise in yields reflects how sensitive the market is to energy costs, especially when big geopolitical moves, like the US extending a cease-fire with Iran, are in play.
Markets brace for prolonged high rates
Even though oil eased slightly to $98, higher prices are expected to push up inflation in India.
Add in tensions like the closure of the Strait of Hormuz and a seized Iranian ship, and markets are now bracing for longer periods of high interest rates.
As Kunal Sodhani, Head of Treasury at Shinhan Bank, put it, investors are adjusting fast as "Markets continue to factor in a degree of policy tightening, with elevated swap rates versus pre-conflict levels indicating expectations of a 'higher-for-longer' interest-rate environment," grow stronger amid all this uncertainty.