Macro and Government Bond Commentary: Yields close lower tracking global benchmarks, liquidity deficit widens • 10Y benchmark (7.10 GS 2034) opened mildly lower at 6.85% despite a rise in treasury yields overnight (after FOMC minutes indicated gradual easing going ahead). Yields were ranged but traded with a downward bias on the day with global benchmarks. The 10Y point closed trade at 6.84% vs 6.86% prev. • T-bill auction result: RBI offered 91-days T-bills at 6.49% for INR 70bn, 182-days T-bills at 6.66% for INR 60bn, and 364-days T-bills at 6.65% for INR 60bn. • As on 26th Nov, system liquidity deficit widened to INR 364bn (without adjustments to daily CRR imbalances). This was after monthly GST outflows in Nov (for Oct economic activity) as well as anecdotes RBI FX intervention. Liquidity conditions should ease this week with month-end GOI spending coming in.
