India bonds continue rally ahead of inflation data

Indian government bond yields extended their rally on Monday, with the benchmark 10-year yield falling by nearly 4 basis points. Easing crude oil prices and hopes of a peace deal between the United States and Iran supported market sentiment.

Markets await inflation signals

Investors are now focused on upcoming inflation data from India and the US. The releases are expected to provide cues on the outlook for interest rates and may help shape expectations in government bond markets.

Crude prices and geopolitical sentiment

The decline in crude oil prices contributed to the improvement in sentiment around Indian bonds. Hopes for progress toward a US-Iran peace deal also supported the rally, according to the supplied market update.

The benchmark 10-year government bond yield remains the key reference point for investors tracking the direction of Indian interest-rate expectations. Further market direction will depend on the inflation data and its implications for the rate outlook.