Macro and Government Bond Commentary: Yields lower with global benchmarks, liquidity deficit widens • 10Y benchmark (7.10 GS 2034) opened lower at 6.81% tracking a fall in treasury yields overnight (following lesser than expected rise in PCE inflation). Yields were ranged through the day, and with a slightly downward bias to close trade at 6.81% vs 6.82% prev. India MPC minutes for the Dec policy meeting were along the lines of policy statement. • As on 20th Dec, system liquidity deficit widened to INR 1.76tn (without adjusting for daily CRR imbalances). This is after quarterly advance tax outflows. Conditions should start improving this week on month-end GOI spending.
