Macro and Government Bond Commentary: Yields mildly lower, liquidity surplus widens ahead of advance tax outflows • 10Y benchmark (7.10 GS 2034) opened little changed at 6.78% despite moves higher in treasury yields overnight (with worse than expected US PPI inflation). Yields were ranged through the day, with the 10Y point closing trade at 6.77% vs 6.78% prev. • RBI weekly auction cut-off: RBI sold 6.79 GS 2034 at 6.75% for INR 220bn, set the coupon for New GOI SGrB at 6.98% for INR 50bn, and 7.09 GS 2074 at 7.01% for INR 100bn. • As on 12th Dec, system liquidity surplus was at INR 643bn (without adjusting for daily CRR imbalances).
