Indian government bonds eased after a recent rally, with investors turning cautious ahead of upcoming debt auctions. At the same time, shifting US Iran peace talk expectations added uncertainty for risk appetite, pushing bond yields higher. The combination of heavy supply expectations and global geopolitical developments kept demand muted and helped reverse earlier gains in the market.
Indian government bonds slid for a third straight day as oil prices climbed amid Middle East tensions. With fresh debt supply and bond auctions approaching, traders turned cautious. Since India imports most of its oil, higher crude directly feeds inflation and rate expectations, pushing overnight index swap rates up as markets brace for stubbornly elevated costs.
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