10yr benchmark yields traded in the range of 6.96%-7.04% and eventually ended the month 13bps lower sequentially at 7%. The 10y benchmark averaged 7.01% in May.

Yields have been trending lower on the back of higher than budgeted dividend payout by the RBI to the government and also expectations of an end to the rate-hike cycle as inflation continues to ease.

No rate action is expected at the MPC meeting in June although a change in stance is a possibility. A change in stance is however unlikely to have any significant bearing on yields.