By Dharamraj Dhutia MUMBAI, Oct 17 (Reuters) – Indian government bonds are expected to start Friday with an easing bias, as traders who booked profits a day earlier await a fresh supply of debt through the weekly auction. The yield on the benchmark 10-year note may sway between 6.49% and 6.52%, a trader at a private bank said, after closing at 6.50% on Thursday. Bond yields move inversely to prices. New Delhi to sell bonds worth 300 billion rupees ($3.41 billion), which includes 180 billion rupees of the liquid five-year bond. "The string of events that were scheduled are now behind us, and demand-supply dynamics will be back in focus, and any weakness for the five-year paper could see a further uptick in yields," the trader said. Bonds witnessed an end to their three-day winning streak on Thursday after the minutes of the Reserve Bank of India's latest meeting were in line with estimates. The members of India's interest-rate panel flagged room for future rate cuts as the country's inflation outlook eases. Earlier this month, the RBI held interest rates, while two members of the rate panel favoured a change in stance to "accommodative" from "neutral". India's retail inflation dropped to 1.54% in September, an eight-year low, and HDFC Bank anticipates inflation falling to its lowest ever level of 0.5% in October, bolstering calls for a rate cut in December. RATES Paying bias is expected to continue in India's overnight index swaps (OIS), especially for the longer end. The one-year OIS rate ended at 5.4325% on Thursday, while the two-year rate closed at 5.3775%. The five-year swap rate settled at 5.6275%. KEY INDICATORS: ** Benchmark Brent crude futures were 0.6% lower at $60.70 per barrel, after easing 1.4% in the previous session ** Ten-year U.S. Treasury yield at 3.9516%; two-year yield at 3.4055% ** India to auction sovereign bonds worth 300 billion rupees ** RBI to set underwriting fees for sovereign bond auction worth 300 billion rupees ** RBI to conduct three-day variable rate repo auction for 500 billion rupees ($1 = 87.9990 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Rashmi Aich)
(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
