FX.co ★ India 10Y Yield Stabilizes as Oil Prices Ease from Highs

The yield on India’s 10-year G-Sec hovered around 6.9%, stabilizing after recent declines as investors tracked movements in crude oil. Oil prices eased from recent highs even as tensions between the United States and Iran persisted. Market sentiment stayed cautious, though the pullback in crude tempered worries about the potential economic fallout for India.

Brent crude had earlier climbed as high as $95.50 per barrel after the United States launched fresh strikes on multiple targets in Iran, heightening geopolitical tensions and stoking fears of disruption to global energy supplies. Prices subsequently retreated from those levels, offering some respite to bond markets.

In the United States, inflation data delivered mixed signals. Headline inflation quickened to 4.2% year-on-year, its highest level in more than three years, while core inflation rose less than anticipated. The softer core reading helped keep expectations for near-term Federal Reserve interest rate moves largely unchanged.