Debt Market Outlook

AS ON 31st December 2023



The 10yr benchmark yields traded in the range of 7.16%-7.29% in Dec-23 and eventually ended the month 10.6bps lower sequentially at 7.17%. The 10y benchmark averaged 7.22% in December.

Yields traded with a strong positive bias over the month as the last FOMC meeting signaled a possible pivot around the corner. The Fed is expected to start reversing the rate hikes in H2CY24 and global yields are already starting to price-in the same.

However, on the domestic front, the RBI is expected to hold rates and retain policy stance as we head towards the end of FY24. Inflation trajectory, global rates, liquidity position and geo-politics/crude will continue to remain key monitorables.