Macro and Government Bond Commentary: Yields fall with global benchmarks, hopes of further liquidity infusion by the RBI • 10Y benchmark (7.10 GS 2034) opened lower at 6.81% tracking a fall in treasury yields overnight (following softer than expected core CPI inflation). Yields fell further in the day, with good demand seen in the near end of the curve. A segment of market is hoping that the RBI may announce OMO purchase/CRR cut to infuse durable liquidity in the system. The 10Y point closed trade at 6.78%. • RBI overnight VRR auction result: The RBI accepted bids for INR 307.6bn (against INR 500bn notified) at 6.51%. • As on 15th Jan, system liquidity deficit was INR 2.2tn (without adjusting for daily CRR imbalances)
