Benchmark 10-year bond yield at two-month low tracking U.S. peers

Benchmark 10-year bond yield at two-month low tracking U.S. peers

India’s benchmark 10-year bond yield dropped to its lowest in over two months on Friday, tracking the drop in their U.S. counterparts, and on expectations that the Reserve Bank of India (RBI) may not raise rates by 50 basis points next week.

The 10-year bond yield was trading at 7.2775% by 0420 GMT, after falling to 7.2695%, its lowest since May 26. It ended at 7.3316% on Thursday.

U.S. Treasury yields fell overnight after data showed the economy contracted again in the second quarter, suggesting that the Federal Reserve may not need to be so aggressive to cool inflation.

Traders said expectations of the RBI raising rates by 50 bps have reduced with most now expecting them to raise rates by 25 to 35 bps on Aug. 5.

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