Macro and Government Bond Commentary: Govt. Bonds 26-Mar 25-Mar Change* Yields fall on optimism around H1 FY26 borrowing, replacement demand 3 mth T-Bill (Ind.) 6.48% 6.45% 3.00 from OMO settlement 6.79% 2034 6.60% 6.64% -3.41 • The 10Y benchmark (6.79 GS 2034) opened mildly lower despite moves 7.10% 2034 6.64% 6.68% -3.82 higher in treasury yields overnight (with latest US consumer confidence 7.18% 2037 6.71% 6.77% -5.31 survey indicating rise in inflation expectations). Yields started edging lower Corp. Bond (AAA PSU) in the morning session and saw demand picking up sharply early in the 5 yrs 7.30% 7.35% -5.00 afternoon. This was said to be on optimism that the H1FY26 borrowing was 10 yrs 7.25% 7.25% 0.00 likely to be below INR 8tn, along with a replacement demand from Corp. Bond (AAA Non-PSU) settlement of OMO purchase auction (held yesterday). The 10Y point was the lowest in over 2 years, and closed trade at 6.60% vs 6.63% prev
