INDIA: RBI to Purchase INR1 tn of Bonds, Enter FX $5bn FX Swap

Bond futures took the overnight lead and rallied strongly in the morning session, but failed to hold above a key technical, falling back in the afternoon.  TYZ5 is up +0.04 at 112-29+, after a high of 113-02+ earlier, just above the 20-day EMA of 113-01+ only to retreat in afternoon trade.  

Cash has been strong also with yields 1-2bps lower across the curve.  

• The 2-Yr fell -1.6bps to 3.561%
• The 5-Yr is down -1.7bps at 3.68%
• The 10-Yr is lower by -1.6bps at 4.072%
• The 30-Yr is down -1bps at 4.657%.

The bond market has been starved of data but will get some non-government led releases tonight in the ADP Employment Change (consensus 30k; prior -32k) S&P Global US Services PMI (forecast 55.2; prior 55.2) and ISM Services Index (forecast 50.8; prior 50.0).  

For issuance, the focus tonight remains on bill issuance with a US$95bn 6-week bill auction ahead of the US Treasury Quarterly Funding announcement. 

Bond futures took the overnight lead and rallied strongly in the morning session, but failed to hold above a key technical, falling back in the afternoon.  TYZ5 is up +0.05 at 115-23+, after a high of 115-29+ earlier, just above the 20-day EMA of 115-28+.

Cash has been strong also with yields 1-2bps lower across the curve.  

• The 2-Yr fell -1.6bps to 3.561%
• The 5-Yr is down -1.7bps at 3.68%
• The 10-Yr is lower by -1.6bps at 4.072%
• The 30-Yr is down -1bps at 4.657%.

The bond market has been starved of data but will get some non-government led releases tonight in the ADP Employment Change (consensus 30k; prior -32k) S&P Global US Services PMI (forecast 55.2; prior 55.2) and ISM Services Index (forecast 50.8; prior 50.0).  

For issuance, the focus tonight remains on bill issuance with a US$95bn 6-week bill auction ahead of the US Treasury Quarterly Funding announcement.