FX.co ★ India 10Y Yield Holds Steady Ahead of CPI Data

The yield on India's 10-year government securities remained steady at approximately 6.52% on Monday. This stability was maintained as investors anticipated the release of September's inflation data expected later today. The forecast suggests a decrease in consumer prices to 1.70%, which would fall below the Reserve Bank of India's (RBI) target range of 2–6%, keeping the average for July to September at around 1.7–1.8%. Should this latest inflation figure come in lower than expected, it may bolster optimism for possible interest rate cuts, applying slight downward pressure on yields. RBI Governor Sanjay Malhotra pointed out that reduced inflation provides policy flexibility, aligning with market expectations for a rate cut in December following pauses in August and October, with additional easing potentially on the horizon in February. Nonetheless, uncertainty persists among investors due to renewed trade tensions between the U.S. and China, following President Trump's threat of imposing a 100% tariff on Chinese products. Domestically, the sentiment is also affected by a substantial 50% tariff on Indian goods and stricter immigration policies under recent U.S. initiatives.