10-year benchmark yield touch 2 month low

The 10-year benchmark yield fell to 8.34% from 8.48%, touching a 2-month low of 8.28% during the week.

Bonds were benefited by lower crude prices while traders bought debt to meet their reserve requirements. Liquidity, however, faced problems due to the treasury bill and bond auctions, draining cash from the system.

Better-than-expected industrial output growth of 7.1% Y-o-Y barely had an impact on bonds while the WPI inflation at 12.10% Y-o-Y appeared to have been factored in. Traders will watch the inflation release while liquidity conditions may be under pressure.

(Credence Analytics India Pvt Ltd)