India’s 10-Year G-Sec Edges Higher: Supply Pressures Keep Yields Firm

India’s benchmark 10-year G-Sec opened slightly higher at 6.6261%, reflecting a measured response to persistent supply concerns and a steady macro backdrop. While the move is modest, it underscores how weekly auctions and state development loan calendars continue to shape demand at the long end. Global yields and oil trends remain secondary but relevant tailwinds.

Key highlights

• Yield print: 10-year yield at 6.6261%; previous close 6.6137%, indicating a mild uptick.
• Supply lens: Focus on upcoming central and state auctions, with traders sensitive to cut-off levels and tails.
• Liquidity backdrop: Balanced system liquidity reduces volatility but keeps demand-supply dynamics in focus.
• Curve view: Mild steepening risk if long-end supply stays heavy; belly seen more resilient.
• Positioning: Preference for selective duration, hedged with roll-down strategies and active auction participation.
• Near-term range: Yields likely to trade in a tight band unless external catalysts shift global rate expectations.

The incremental rise suggests markets are pragmatically balancing supply absorption with stable domestic conditions, keeping duration exposure disciplined while watching auction signals closely.

Sources: Reuters, Business Standard, The Economic Times