Bond yields fall on 10-year US yield’s drop below 4%, subdued oil

Indian government bond yields ended lower on Tuesday as the 10-year U.S. yield eased below 4% again, while oil prices remain subdued.

The focus remains on U.S. Federal Reserve as well as the Reserve Bank of India’s meetings later this week.

The benchmark 10-year Indian government bond yield ended at 7.3957%, after rising five basis points (bps) to 7.4454% on Monday.

“U.S. yields have come off and this indicates that investors are not very worried over the Fed decision and hence Indian yields have also come down,” said Anuj Bhala, head of rates trading at SBM Bank (India).

“Better local economic data as well as lower oil prices, all are aiding sentiment.”