Page 3 - Bond Yield News Today

The Reserve Bank of India (RBI) kept monetary policy rate unchanged at 6.50 percent.

Indian government bond yields plummeted this week, with the benchmark yield posting its biggest drop in 15 months, as investors cheered a fiscally-prudent federal budget and as U.S. Treasury yields nosedived.

In the Union Budget 2024, Finance Minister extended the 50-year interest free loans to state governments for another year, as part of the governments Gati Shakti master plan.

Lower-than-expected fiscal deficit cheered bank stocks as cost of borrowing reduces

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Concerns revolve around the mandatory prepayment clause, including coupon step-ups and utilising proceeds from the monetisation of assets like Afcons and Gopalpur Port.

Earlier in the day, states raised 160 billion rupees ($1.92 billion), the lowest for a weekly auction, via 10-year bonds at around 7.74%.

G Chandrashekhar says: “Once the speculators start to unwind their overly bullish bets, I think that will probably place a cap on the upside potential for gold. But once the rate cut signals become clear because the timing is what is important. And therefore, once the timing of the rate cut becomes clear, which in my view could be in the second quarter then gold will start to move up decisively.”

Given the US bubble economy, a rising fiscal deficit and foolish behaviour of markets, the Federal Reserve faces a tough balancing act. It has already had to walk back some dovish statements, and further policy mistakes risk damage to the entire global economy.