Macro and Government Bond Commentary: Yields reverse early upside despite weakness in INR, India MPC meeting outcome closely watched • The 10Y benchmark (6.79 GS 2034) opened higher at 6.50% tracking a sharp rise in treasury yields overnight (despite no signs of amelioration in trade tension between US and China). This upside in yields did not sustain, and yields traded with a downward bias through the day with receiving interest in OIS as well as positioning ahead of the MPC meeting outcome tomorrow. The 10Y point closed trade at 6.47% vs 6.48% prev. A 25-bps rate cut by the MPC is largely priced in, though markets remain divided over the change in stance given fresh growth concerns as well as heightened geopolitical uncertainty. In addition, fresh projections for real GDP and CPI inflation for FY26 (as well as the assumptions around it will be closely watched).
