Bonds yields surge tracking higher crude oil prices
Today, the markets are expected to remain volatile and might react negatively.
Brent crude closed on Thursday at $73.59 after touching $74.75 at its 3-year high. The uptick in oil prices increased fear among the market participants that this could not only create inflationary pressure but also impact the fiscal and current account deficits.
In addition, the domestic bond market will take cues from its US counterparts. 10-Year US bond rose to 2.93% on Thursday as the selloff continued, as rising inflation expectation could lead to Fed increasing rates for another 3 times after the March hike.
Further, the RBI released the MPC minutes yesterday, which sounded hawkish as compared to its statement of monetary policy.
10-Year benchmark bond 7.17 GS 2028 closed 7.63% as against its previous close of 7.54%. Today, the markets are expected to remain volatile and might react negatively on back of above-mentioned market developments.