Indian Benchmark Yield Rises Above 7% Following US Peers’ Lead, RBI Meeting in Focus

On Monday, Indian government bond yields rose above 7% due to the spike in US peers, and investors are waiting for the Reserve Bank of India’s (RBI) monetary policy decision later in the week. The 10-year benchmark 7.26% 2033 bond yield was at 7.0050% as of 10:05 a.m. IST, compared to 6.9823% in the previous session. US Treasury prices also fell, with yields rising, after data showed employment increased more than expected in May, which could lead to a hike in interest rates by the Federal Reserve. However, a higher unemployment rate of 3.7% may cause the Fed to forgo an interest rate hike. Oil prices, on the other hand, rose by 1% to near $77 per barrel after Saudi Arabia, the top exporter, pledged to cut production by another 1 million barrels per day from July, counteracting macroeconomic concerns that have depressed markets. Investors are now awaiting the RBI’s monetary policy decision, due to be announced on June 8. According to a Reuters poll of 64 economists, the RBI is expected to leave the key interest rate unchanged at 6.50% until the rest of 2023.