Indian bonds gain as US Treasury yields fall
Indian government bonds got a boost on Monday, with the 10-year yield dipping to 6.6750% after US Treasury yields fell and there was more cash flowing in the local market.
Longer-term bonds also saw their yields drop a bit.
Why do lower yields matter?
Lower yields mean it's cheaper for companies and the government to borrow money, while existing bondholders can see price gains as yields fall.
Even though the RBI has cut rates, global pressures and higher central government borrowing have kept overall yields higher this year, making these levels attractive for investors looking for steady returns.
What led to the current situation?
US Treasury yields dropped after softer inflation data in January, and India saw a surge in daily liquidity while New Delhi carried out a debt switch strategy.
This combo made Indian bonds look even more appealing.
What next for the bonds?
Analysts say 10-year bond yields could remain range-bound, depending on government borrowing and global factors.