India bonds to continue winning run but debt auction cutoffs to act as key driver

Indian government bonds were expected to extend their gains for a fifth straight session on Friday, Business Recorder reported, although a scheduled debt sale could limit the advance. A private-bank trader said the 6.94% 2036 bond yield could remain within 7.12% to 7.18% until the auction; it closed Thursday at 7.1710%, after falling almost 25 basis points over four sessions.

New Delhi is set to raise 360 billion rupees ($3.81 billion) by selling 15-year and 50-year bonds. The trader said the auction’s cutoff yields would help determine whether the secondary market rally could continue, including whether yields could stay below 7.15%. Brent crude remained under $100 per barrel after a fall of more than 8%, while the US 10-year Treasury yield declined to around 4.85%. Investors are also watching India’s October inflation figures next week for signals about the Reserve Bank of India’s policy direction.