US Inflation Data to Drive Trends for G-Sec and UST This Week

Weekly Market Highlights:

1. The 10 year 2034 G-sec yield was stable at 6.85% over the week as markets brace for FED’s rate cut.
2. Weekly Gsec auction cut-off for the 2027, 2039 and 2064 stood at 6.7401%, 6.9082% and 7.0157% respectively.
3. 3M and 6M T-bill auction data yields were at 6.63% and 6.73% respectively, same level since last week.
4. The INR Bonds high yield Index stood at 9.628% down 7 bps biweekly basis.
5. Government expenditure is on the rise, as indicated by the buildup of surplus liquidity in the banking sector, with the Centre increasing its cash injections into the system.
6. Markets brace for FED’s rate cut on 18th September while RBI is less likely to cut rates this year unless food inflation shows signs of easing.
7. crude oil futures rose to around USD 68.7 per barrel in a likely technical rebound after plunging about 8% last week.
8. US nonfarm payrolls grew by 142,000 jobs last month with an unemployment rate of 4.2%, following a downward revision to 89,000 for July. The disappointing labor market data reinforced fears of a slowdown in the US supporting a FED rate cut as 10Y UST fell to 3.74% this week.