Macro and Government Bond Commentary: Yields steady on light volumes, liquidity deficit widens further on GST outflows • 10Y benchmark (7.10 GS 2034) opened little changed despite moves higher in treasury yields overnight (with markets factoring in less than 50 bps easing by the Fed next year). Yields were ranged for the rest of the day as most participants were away for Christmas and Year-end festivities. The 10Y point closed trade at 6.80%. • As on 23rd Dec, system liquidity deficit widened further to INR 2.42tn (without adjusting for daily CRR imbalances). This is after monthly GST outflows. Conditions should start improving this week on month-end GOI spending.
