India bonds may firm with Treasuries; crude, supply could cap gains

Indian government bond prices could rise on Thursday as US Treasury yields eased, although crude oil volatility and an upcoming government auction are expected to restrain any advance, Business Recorder reported. The yield on India’s benchmark 6.94% 2036 bond ended Wednesday at 7.44%; a private-bank trader put its likely range for the session at 7.42% to 7.47%. Bond prices and yields move in opposite directions.

The US Federal Reserve kept its policy rate unchanged on Wednesday, while the US 10-year Treasury yield fell 6 basis points to 4.98% in Asian trading. In India, concerns that expensive oil could prompt further Reserve Bank of India tightening have unsettled bonds, while attention is turning to Friday’s 330 billion rupee ($3.47 billion) debt sale for indications of investor demand. The rupee was quoted at 95.22 per dollar after reaching 94.46 last week.