The 10y benchmark traded in a narrow range of 6.20-6.25% with yields across most
points on the curve easing, some points more than others. With major events such as the
RBI MPC and US Fed’s Jackson Hole meeting out of the way without creating much sway
on yields, it now falls upon more high frequency datapoints such as CPI Inflation print,
G-Sec auction dynamics and Crude prices to guide the trajectory of yields. However,
expectations are that CPI Inflation has passed its peak and it will moderate to levels that
the RBI is more comfortable with. As such, we do not see any immediate upside pressure
on yields and expect it to trade in a range with a dovish bias. In the medium term, it will
be important to observe the actions of the Fed and its repercussions on the actions of the
RBI and also how the domestic growth story continues to evolve.