FX.co ★ India 10Y Yield Firms as Oil, US Yields Rise

The yield on India’s 10-year government security hovered around 7.1%, rebounding from recent declines as elevated crude oil prices and rising US Treasury yields weighed on sentiment across debt markets. Brent crude traded above $107 per barrel after renewed geopolitical tensions in the Middle East raised concerns about supply disruptions and persistent inflation risks. At the same time, the US 10-year Treasury yield climbed to its highest level in nearly a year, reinforcing expectations that the Federal Reserve may keep interest rates higher for longer.

In a separate development, the Reserve Bank of India moved to support liquidity in the sovereign debt market by increasing annual trading targets for primary dealers. Under the revised framework, the country’s 21 bond market makers are required to transact substantially larger volumes of government securities this financial year, driving a sharp pickup in activity in the benchmark 10-year bond.