Indian bonds breathe easy as Treasury yields decline

What happened: Indian government bond yields fell early Thursday, tracking a rally in US Treasuries. The benchmark 6.94% 2036 bond yield was down 2.5 basis points at 7.3714% at 11:40 a.m., after falling as much as 4 basis points at the open. Key numbers: 2036 bond yield down 2.5 bps at 7.3714%, after a 4 bps drop at Why it matters: Liquidity concerns, climbing interest rates and mounting supply have capped the gains. Traders are trimming risk ahead of a large debt auction and RBI cash-reserve-ratio requirements effective Friday, while rising inflation fuels expectations of tighter policy.

Indian government bond yields fell early Thursday, tracking a rally in US Treasuries. The benchmark 6.94% 2036 bond yield was down 2.5 basis points at 7.3714% at 11:40 a.m., after falling as much as 4 basis points at the open.

Liquidity concerns, climbing interest rates and mounting supply have capped the gains. Traders are trimming risk ahead of a large debt auction and RBI cash-reserve-ratio requirements effective Friday, while rising inflation fuels expectations of tighter policy.