Indian government bonds see slight dip as oil prices fluctuate
Indian government bonds had a bit of a roller coaster on Wednesday, thanks to shifting oil prices and some major state bond sales coming up.
The yield on the 2035 bond dipped slightly to 6.86%.
Oil hovered near $100 a barrel after talk of a possible U.S.-Iran cease-fire, which helped ease worries about supply.
Crude's impact on economy and upcoming state bond sales
Oil prices dropping (now at $99.60) could be good news for India's economy:
Brickwork Ratings says every $10-per-barrel swing in crude typically shifts the current account deficit by about 0.3 to 0.5% points of GDP and, when crude rises by $10, raises retail inflation by roughly 20 to 30 basis points (0.20 to 0.30%); a $10 fall would have the opposite effect.
Meanwhile, states plan to sell 395.4 billion rupees in bonds on Friday, which could shake things up further.
Swap rates also shifted as investors reacted to all this global drama, just another busy day in the world of finance.