FX.co ★ India 10Y Yield Falls as Foreign Inflows Persist

The yield on India’s 10-year government security eased to around 6.75%, pulling back from a one-week high as investors stepped in to buy after the previous session’s sharp selloff. Ongoing foreign inflows also continued to underpin demand. However, overall sentiment stayed cautious: renewed tensions in the Middle East kept Brent crude close to $79 per barrel, while elevated US Treasury yields pressured global fixed-income markets. Expectations of a tighter US monetary stance persisted after the Federal Reserve’s latest meeting minutes underscored ongoing inflation concerns, reinforcing the likelihood of another rate hike later this year. Despite these headwinds, overseas investors remained net buyers of Indian government bonds, accumulating INR 365 billion ($3.82 billion) through the Fully Accessible Route since the start of June, supported by rising expectations that India’s debt will be added to Bloomberg’s Global Aggregate Index.