Macro and Government Bond Commentary: Chatter of RBI demand in G-sec limits upside in yields, liquidity deficit narrows • 10Y benchmark (6.79 GS 2034) opened mildly lower at 6.68% in absence of any fresh cues. Yields edged higher in the morning session likely tracking weakness in INR, though this upside in yields did noy extend. Moves higher in yields reversed in the afternoon session, with chatter of RBI purchases in bonds heard (as also seen from a drop in durable liquidity deficit). This allowed the 10Y yield to close flat at 6.68%. • As on 28th Jan, system liquidity deficit narrowed to INR 2.5tn likely (without adjusting for daily CRR imbalances)
