FX.co ★ India 10Y Yield Eases From Two-Year High

The yield on India’s 10-year government security eased to around 7.16%, pulling back from more than two-year highs as lower-than-expected government borrowing offered some relief and bargain hunting followed Monday’s sharp selloff. The government cut its FY27 gross borrowing estimate to about INR 15.99 trillion from INR 17.2 trillion, a move that may alleviate supply concerns, even as a continued tilt toward longer-duration issuance remains a drag on sentiment.

In global markets, the US 10-year Treasury yield hovered near 5.23% after hitting its highest level since June 2007, while Brent crude advanced to around $106.65 per barrel, sustaining inflationary pressures and reinforcing expectations of an RBI rate hike next week. At the same time, potential additional bond sales by the RBI to absorb surplus liquidity could further weigh on supply, capping the downside in yields.