FX.co ★ India 10Y Yield Rises to 16-Month High

The yield on India’s 10-year G-Sec climbed to about 6.84%, extending its advance to a sixteen-month high as surging crude oil prices and rising US Treasury yields triggered broad selling. Indian government bonds came under pressure amid persistently high oil prices, driven by escalating tensions in the Middle East, and a sharp rise in US yields, with the 10-year US Treasury crossing 4.40% for the first time in nearly eight months. Elevated oil prices pose a particular risk for India, the world’s third-largest importer of crude, as they threaten to stoke inflation and widen the current account deficit. At the same time, the market is contending with heavy debt supply, with Indian states planning sizeable bond issuances that could push quarterly supply to record levels. The rupee’s slide to all-time lows has further compounded the pressure, deepening concerns over capital flows and adding upward momentum to domestic bond yields.