17 Jun 2024

Positive momentum for G-Secs is expected as the Federal Reserve plans for five rate cuts

author dp
Team INRBonds
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Weekly Market Highlights:

  1. 10 year 2034 Gsec yields fell by 4 bps on weekly basis.
  2. Weekly Gsec auction cut-off for the 2031, 2039 and 2064 stood at 7.02%, 7.034% and 7.1175% respectively.
  3. Weekly T-bill auction data shows 3M and 6M yields up by 1 bps compared to previous week auctions.
  4. Domestic market liquidity surplus stood at Rs.148.2 billion.
  5. India May core inflation CPI stands at 3.1% and combined inflation at 4.75%.
  6. The INR Bonds high yield Index stood at 9.565% down 8bps biweekly basis.
  7. The US CPI stands at 3.27%.
  8. FOMC expects a total of 5 rate cuts in FY25.
  9. As the Fed cuts rates throughout FY25, the value of existing bonds in the market is expected to rise, making high-yield corporate bonds particularly attractive for the current fiscal year.
  10. Despite a hawkish commentary by the FOMC, markets discounted the upcoming rate cuts as USD 10 year yields down and closed at 4.22%.

Market Data

Particulars

14/6/2024

7/6/2024

Change

10 Yr Benchmark Gsec (%)

6.98%

7.02%

-4 bps

Banking Liquidity (in Rs Billion)

148.2

450.2

67.08%

5 Yr OIS (%)

6.34%

6.35%

-1 bps

1 Yr OIS (%)

6.77%

6.78%

-1 bps

INRBonds Retail High Yield Index

9.57%

9.64%

-8 bps

Nifty

23,466

23,290

0.75%

10 Yr SDL

7.41%

7.41%

0 bps

91 Day T-Bill (%)

6.84%

6.86%

-2 bps

182 Day T-Bill (%)

6.99%

7.02%

-2.64 bps

10 Yr US Treasury Yield (%)

4.22%

4.43%

-21 bps

US Junk Bond Yield (%)

7.54%

7.62%

-8 bps

Brent Crude Oil (In USD per Barrel)

82.67

79.44

4.07%

Primary & Secondary Corporate Bonds Data

Primary Public Debt Issuance

Maturity

Yield

IP Frequency

8.86% 360 One Prime Ltd

18 Months

9.22%

Monthly

9.16% 360 One Prime Ltd

18 Months

9.23%

Annual

8.98% 360 One Prime Ltd

24 Months

9.36%

Monthly

9.35% 360 One Prime Ltd

24 Months

9.35%

Annual

9.16% 360 One Prime Ltd

36 Months

9.55%

Monthly

9.55% 360 One Prime Ltd

36 Months

9.55%

Annual

9.21% 360 One Prime Ltd

60 Months

9.60%

Monthly

9.6% 360 One Prime Ltd

60 Months

9.60%

Annual

9.44% 360 One Prime Ltd

120 Months

9.86%

Monthly

9.85% 360 One Prime Ltd

120 Months

9.84%

Annual

Top 5 Secondary Retail Trades

Maturity

Yield

-

7.02% NATIONAL HIGHWAYS AUTHORITY OF INDIA

10/2/2026

5.15%

11.40% KEERTANA FINSERV PVT LTD

10/5/2026

13.25%

8.40% ICICI BANK LTD

13/5/2026

7.70%

8.3439% HDB FINANCIAL SERVICES

5/7/2027

8.32%

9.95% UP POWER CORP LTD

31/3/2031

9.21%

Currency Market Data

Particulars

14/6/2024

7/6/2024

Change

USD/INR

83.55

83.525

0.03%

DXY

105.52

104.93

0.56%

USD/ Brazil Real

5.38

5.34

0.75%

EUR/ USD

1.0702

1.0803

-0.93%

USD/CNY

7.2558

7.2478

0.11%

USD/JPY

157.38

156.7

0.43%

USD/ Russian Ruble

89.5779

88.63

1.07%