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MARKET EYE-Indian bond yields inch higher; policy in focus
June 3, 2014 / 3:43 AM / in 4 years

MARKET EYE-Indian bond yields inch higher; policy in focus

* India’s benchmark 10-year bond yield up 2 basis points at 8.68 percent tracking a rise in U.S. treasury yields, but the central bank’s policy tone will be crucial for further cues. * U.S. Treasuries yields rose on Monday, after falling to one-year lows last week, as investors completed month-end bond purchases and before a highly anticipated European Central Bank meeting and U.S. employment report due later this week. * The RBI will release it monetary policy review at 0530 GMT. * Reserve Bank of India Governor Raghuram Rajan is expected to keep the country’s key lending rate unchanged and temper his tough rhetoric on inflation in a conciliatory gesture to a new government elected on a platform of reviving economic growth.

* Traders are expecting a dovish policy stance from the central bank on hopes the government will work on bringing down inflation through supply side measures, giving the RBI some room to cut rates to boost growth. (swati.bhat@thomsonreuters.com/; swati.bhat.thomsonreuters.com@reuters.net)

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