Macro and Government Bond Commentary: Yields reverse early upside, liquidity deficit widens • 10Y benchmark (7.10 GS 2034) opened higher at 6.83% tracking a rise in treasury yields overnight (following an upward revision in US GDP as well as fewer jobless claims). Moves higher in yields did not extend further, with the 10Y point closing trade little changed at 6.82%. • RBI weekly auction results: RBI set the coupon for the new GS 2029 at 6.75%, for INR 140bn, and sold 7.34 GS 2064 at 7.06% for INR 150bn. • As on 19th Dec, system liquidity deficit widened to INR 1.62tn (without adjusting for daily CRR imbalances). This is after quarterly advance tax outflows.
