Yields have broadly been on a rising trend for the month of December. The 10y benchmark yield traded in the range of 7.21%-7.33% and eventually ending the month 5bps higher m-o-m at 7.33%. The 10y benchmark averaged 7.28% in December.

Yields have been under pressure due to lingering inflation concerns. Reopening of China as it ended its Zero-Covid policy could add to inflationary pressures. In coming month, the market will try to positon ahead of the Budget and the fiscal deficit target would be a critical cue.