• US yields remained volatile in the past month due to debt ceiling deadlock amidst robust macro data.
  • Markets expect Fed to pause rate hikes in June, with a 50% probability of a July hike.
  • Upside in European yields likely to be capped on weak growth prospects.
  • Short-term UK gilt yields seen higher on bets of more BOE rate hikes.
  • BOJ’s YCC policy adjustment unlikely at June policy.


  • 10-year bond yield traded within 6.96-7.12% range over the last month.
  • Short-term yields softened on favourable liquidity conditions.
  • RBI could continue with VRRR auctions to keep system liquidity near neutral.
  • 5-year segment witnessed strong demand at G-sec auction in May.
  • CP and CD issuances picked pace in May.
  • RBI expected to keep repo rate and stance unchanged at the June MPC meeting.
  • Incoming bond supply and potential weather-driven disruptions could weigh on bonds.
  • 10-year benchmark bond yield seen around 7-7.2% by end-FY24.