Macro and Government Bond Commentary: Yields mildly lower with global benchmarks, liquidity deficit set to narrow with a sharp drawdown in GOI cash balances • 10Y benchmark (7.10 GS 2034) opened mildly lower at 6.79% tracking a fall in treasury yields overnight. Yields were ranged for the day, with some demand witnessed in the morning session. The 10Y point closed trade at 6.79% vs 6.80% prev. • As on 30th Dec, system liquidity deficit was at INR 2.05tn (without adjusting for daily CRR imbalances). Conditions should improve from this point on month-end GOI spending (as witnessed from a sharp fall in GOI cash balances with the RBI at INR 832.38bn vs INR 2.13tn previous).
