Indian Rupee: Yields looking attractive after sell-off – DBS
DBS Group Research strategist Sherilyn Chew says hawkish Reserve Bank of India (RBI) minutes and volatility at the long end of the US Treasury market have pushed India rates higher.
DBS Group Research strategist Sherilyn Chew highlights that attractive yields in Indian Government Bonds have emerged following a sell-off and hawkish Reserve Bank of India (RBI) minutes. Chew points to the 2-year IGB yield reverting to levels last seen before the RBI's June policy package, indicating potential for a steeper 2s5s IGB curve.
Additionally, the fading liquidity support from FCNR(B) is expected to weigh on the 5-year sector, creating opportunities for a more pronounced yield curve. As the front end has already seen considerable hawkish repricing, current levels appear increasingly attractive and may offer room for yields to decrease if incoming data or policy communication turns more dovish.
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