The 10yr benchmark yield traded in the range of 7.14%-7.24% in Jan-24 and eventually ended the month 4bps lower sequentially at 7.14%. The 10y benchmark averaged 7.18% in January.

Yields moved higher towards the beginning of the month tracking the trajectory in US yields and oil prices while reversing their path later in the month as talks of an index inclusion and tighter fiscal deficit target in the Budget started doing the rounds.

With the Budget out of the way and the GoI reaffirming its commitment towards fiscal discipline, yield movement will again be dictated by the RBI’s actions and global spillovers.