Bond yields traded higher on Tuesday as SBI Research report titled 'Inflation and Rate Cut Trajectory' has said that the Reserve Bank of India (RBI) may cumulatively cut the key interest rate in the range of 125-150 basis points (bps) this fiscal (FY26) amid benign inflationary patterns. It suggested that the central bank should go for ‘jumbo’ rate cuts of 50 bps as it would be more effective.
In the global market, U.S. Treasury yields largely moved higher on Monday as investor attention turned to the Federal Reserve meeting and interest rate decision slated for later in the week. Furthermore, Oil prices fell on Monday after OPEC+ decided over the weekend to further speed up oil output hikes, spurring concerns about more supply coming into a market clouded by an uncertain demand outlook.
Back home, the yields on new 10 year Government Stock were trading 13 basis points higher at 6.45% from its previous close of 6.32% on Monday.
The benchmark five-year interest rates were trading 11 basis points higher at 6.17% from its previous close of 6.06% on Monday.
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