Highlights:
- 10Y UST yield rose by 50bps in Oct amidst strong US economic data and rising Trump presidency odds.
- Domestic yields tracked rise in UST yields, with 10Y GSec yield up 8 bps in Oct.
- RBI conducted GSec buybacks worth Rs 49,388 cr in Oct.
- SDL issuances in Oct were lower than the indicative calendar due to higher transfer from centre to states.
- Corporate bond issuances in H1FY25 were up 6% YoY amidst higher NBFC issuances.
- FPI outflows from Indian equities hit a record USD 11 bn in Oct.
- FPIs turned net sellers in debt for the first time since Apr.
- Rupee hit a record low, driven by FPI outflows and a 3.9% MoM rise in dollar index.
- Fed is likely to cut rates by 25bps in its 6-7 Nov meeting.
- A Trump victory could lead to higher UST yields and a stronger dollar, putting some upward pressure on domestic yields and creating a depreciating bias for the INR.
- We expect the 10Y GSec to trade between 6.75-6.95% in the near term.
- We expect USD/INR to trade between 83.90-84.50 in the near term.
