Indian government bond yields were flat in early deals on Monday, as traders held pat awaiting fresh triggers, with focus on US Treasury peers and the RBI’s liquidity management for further moves.
The yield on the benchmark 10-year bond was at 6.3148 per cent as of 10:40 a.m. IST, compared with its previous close of 6.3134 per cent India bond yields barely changed as traders eye fresh cues
The 10-year US Treasury yield was also steady at 4.2847 per cent in Asian hours, after closing at 4.2830 per cent in the previous session.
Traders said they are holding back from taking positions after a disappointing debt auction on Friday triggered a selloff.
"We will closely watch the US Treasury yields and RBI's liquidity moves to gauge further direction; till then the volumes should remain muted," a trader at a private bank said.
"We may see some rally in prices in the second-half if there is demand from banks for quarter-end purchases."
Market participants will also focus on demand for state debt this week, after a lower-than-expected borrowing plan by states for July-September.
Indian states are aiming to raise ₹2.87 trillion ($33.6 billion) via bonds in July-September, compared to market expectations of borrowings of around ₹3 trillion.
Meanwhile, foreign investors stepped up purchases of Indian government bonds last week, and posted their biggest buying in three months.
India's overnight index swap rates were steady in early trading, as investors awaited fresh triggers.
The one-year OIS rate was at 5.54 per cent the two-year OIS rate was at 5.52 per cent and the liquid five-year was at 5.71 per cent.