Macro and Government Bond Commentary: Yields rise with global benchmarks, continued depreciation in INR • 10Y benchmark (7.10 GS 2034) opened higher tracking a rise in treasury yields overnight (following stronger than expected US S&P Global services PMI). Yields rose further in the day, also weighed by continued depreciation in INR (with Nov merchandise trade deficit widening to a record high level) The currency slipped to an all-time low, with anecdotes of RBI intervention heard at 84.92. The 10Y point closed trade at 6.80% vs 6.77% prev. • As on 16th Dec, system liquidity slipped into a deficit of INR 1.1tn (without adjusting for daily CRR imbalances).This is after quarterly advance tax outflows.
