India's 10-year government bond yield falls to around 6.8% as softer oil prices improve bond market demand

⑴ The yield on India’s 10-year government bonds edged down to around 6.80%, reversing part of its recent upward trend, as softer crude oil prices and declining US Treasury yields improved demand for sovereign debt. Brent crude fell by about 1.5% to $87.7 per barrel, extending the previous day’s 1.8% decline, as continued tanker traffic through the Strait of Hormuz and the Red Sea eased supply concerns, despite the ongoing deadlock in US-Iran negotiations. ⑵ The yield on US 10-year Treasury bonds fell to around 4.65%, reversing some of Thursday’s gains as signs of progress toward a potential peace plan in Gaza reduced demand for safe-haven assets, with falling oil prices further contributing to the drop in yields. However, India’s bond gains were limited, as investors await the 340 billion rupee New Delhi benchmark 10-year bond auction and next week’s monetary policy decision from the Reserve Bank of India, with the market generally expecting the central bank to keep its key policy rate unchanged.