India 10Y Bond Yield Dips to 6.5034%: Pre-RBI Policy Easing Signals Optimism

Yield Movement

The benchmark 10-year G-Sec yield eased to 6.5034%, marking a modest 1 bps drop from 6.5132%, as trading resumed post-holidays. This sideways hover near 6.50% comes amid RBI MPC anticipation (Dec 3-5), where strong Q2 GDP (8.2%) tempers aggressive cut bets but low CPI fuels dovish hopes. Bond markets stabilized after recent spikes to 6.57% on growth data.​

Market Drivers

Liquidity tightness from RBI's forex interventions and US tariff risks weigh, yet OMO purchase expectations could cap yields at 6.45-6.50%. A 25 bps repo cut to 5.25% remains polled at 60%, potentially pushing yields to 6.40%. US-India trade talks add volatility, with forecasts eyeing 6.39% in 12 months.​

Key Highlights

Current Yield: 6.5034% (down 1 bps from 6.5132%).​

Trading Range: 6.50-6.53%; 4-week high 6.57%.​

RBI MPC: Dec 5 announcement; cut odds ~60%.​

Forecast: 6.50% Q-end, 6.39% in 12 months.​

Sources: Trading Economics, Investing.com, Moneycontrol, Economic Times