June 20, 2013 / 2:52 AM / 4 years ago

MARKET EYE-Indian bond yields likely higher; debt quota sale crucial

* Indian federal bond yields likely to open 3-4 basis points
higher after Federal Reserve signals tapering down of the
stimulus programme if the US economy continues to recover. The
benchmark 10-year bond yield closed at 7.26
percent on Wednesday.
* The rupee expected to see a sharp drop in line with Asian FX
weakness, which in turn will keep yields biased up.
* Benchmark U.S. Treasury yields surged to their highest levels
in 15 months on Wednesday as Federal Reserve Chairman Ben
Bernanke suggested the U.S. central bank was prepared to reduce
bond purchases if its economic outlook proves correct, even
though the U.S. economy remained stuck at a sluggish pace. 
* The market will wait to see demand at $7.15 billion government
debt quota sale for foreigners, especially coming on the back of
the recent brutal selloff in Indian debt by overseas investors.
* Foreigners have again turned sellers of Indian debt, being net
sellers of $99.89 million on June 18.
* The Reserve Bank of India will sell 10 billion rupees ($170.17
million) of 1.44 percent 2023 inflation-indexed government bonds
on June 25 via uniform price method, it said on Wednesday.
 

 (subhadip.sircar@thomsonreuters.com/;
subhadip.sircar.thomsonreuters.com@reuters.net)

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