Indian bond yields ease as oil cools, Fed rate hike bets tumble ahead of RBI policy

The latest market report highlights that Indian government bonds opened elevated on September 30 as an overnight pullback in oil price marks and a sharp reduction in expectations of another US The US central bank interest-rate gain improved sentiment, even as global yields and energy prices remained elevated.

The benchmark 10-year government bond yield eased to 7.1482% in early session from 7.1628% in the previous session. Bond prices and yields move inversely.

Crude prices offered some relief after retreating from recent highs on Tuesday as energy flows from West Asia revealed signs of normalising. Brent crude, that stated, remained above $100 a barrel and rebounded to around $103 on Wednesday as geopolitical concerns persisted.

US President Donald Trump on Tuesday denied notes that he was prepared to ease sanctions on Iran, keeping uncertainty around regional oil supplies in focus.

US Treasury yields additionally remained elevated. The benchmark 10-year yield hovered around 5.2%, close to multi-year highs after touching 5.293% in the previous session.

At the same time, softer US economic data and comments from New York The US central bank President John Williams prompted traders to scale back expectations of an immediate rate gain.

Market-implied odds of a 25-basis-point Fed interest-rate gain at its next meeting have fallen to around 44% from nearly 70% earlier, according to Reuters. Williams stated on Tuesday there was “no need for urgency” on rates and that policymakers had time to assess incoming data.

Domestic bond traders are additionally looking ahead to the Reserve Bank of India’s monetary policy meeting the week ahead.

The RBI is anticipated to mobilize the repo rate by 25 basis points to 5.50%, according to a Reuters poll of economists, as inflation pressures have broadened. Such a move would be the central bank’s first rate gain since February 2023.