10-year bond yield up 4 bps on fading US rate cut hopes

Mumbai; India's 10-year government bond yield logged its biggest jump in six weeks on Thursday, as hawkish comments from Federal Reserve Chair Jerome Powell reduced rate cut hopes, adding to the domestic market's woes as demand and liquidity concerns persist.

The yield on the benchmark 10-year note settled at 6.5730%, up 4 basis points from the previous session, its steepest rie since September 18.

The Fed cut interest rates by a quarter of a percentage point on Wednesday as expected, but drove down market expectations of a December rate cut.


The odds of a December rate cut receded to 68%, from 91% before the Fed policy, according to CME FedWatch Tool.

The yield on the Indian 10-year note breached a key upside level in early deals, which led to an extended sell-off, traders said.

The market is counting on RBI to shore up banking system liquidity and traders are tracking news on potential U.S.-India trade deal that could impact domestic monetary policy. India's banking system liquidity has swung between deficit and surplus in the past few weeks, with negligible net liquidity injections .