FX.co ★ India 10Y Yield Rises Amid Middle East Tensions

Yields on India’s 10-year Government Security (G-Sec) climbed to 6.7%, a one-week high, as escalating global geopolitical tensions dampened risk appetite. The move came amid a sharp market reaction to joint US–Israeli strikes in Iran that reportedly killed Supreme Leader Ayatollah Ali Khamenei, stoking fears of retaliation and wider regional instability. The upward pressure on yields was further reinforced by offshore flows in non-deliverable overnight index swaps, following strong receiving interest last week in the most liquid one-year, two-year, and five-year tenors. At the same time, investors weighed a supportive domestic signal: India’s Manufacturing PMI rose to 56.9 in February from 55.4 in January, a four-month high that underscores a marked improvement in operating conditions and underlying business activity.