MPC external member Ram Singh signaled that a repo rate hike is not on the cards for now, tying the decision to whether inflation triggers second-round effects. He expects the West Asia conflict to ease, which could moderate price pressures, while saying forex reserves remain adequate and open market operations will support liquidity. Growth, he adds, stays resilient despite supply risks.
Indian government bonds fell sharply Monday after failed US-Iran peace talks pushed oil prices higher, triggering a global risk-off mood. The move weighed on the rupee and equities like the Nifty 50, with traders flagging renewed inflation and growth concerns. Market sentiment reversed after Friday’s bond purchases that assumed a breakthrough, and investors are now watching March inflation data.
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Gold prices stayed steady and are poised for a fourth weekly gain as hopes for a US-Iran peace deal reduce worries about inflation and interest rates. Optimism also grew after a ceasefire between Lebanon and Israel, with potential US-Iran talks over the weekend. Even with stable US unemployment claims, employers remain cautious amid the ongoing conflict.
Haryana has increased minimum wages by 35% for unskilled workers following factory protests and work boycotts driven by higher living costs, surging food prices, and disrupted gas supplies. The government says the move will ease pressure on labourers, but industry expects it to raise operating costs for India’s auto sector.
Department of Economic Affairs Secretary Ajay Seth said monetary and fiscal authorities are taking steps to moderate inflation despite domestic and global headwinds. He stressed that policy action is being calibrated to control price pressures while keeping growth momentum intact. Seth framed the approach as “whatever it takes,” signaling continued coordination to balance inflation containment with economic expansion.
FMCG firms say the Gulf war has sparked sharp, widespread jumps in raw material costs. To respond, companies are tightening budgets and moving to daily price surveillance, signaling frequent price changes across categories. Analysts warn this could strain the fragile consumer spending recovery that was boosted by recent tax reductions.
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RBI Governor Sanjay Malhotra told financial leaders in New York that the central bank is closely monitoring short-term economic fluctuations, including FDI outflows. He outlined reforms to strengthen foreign investment and deepen market integration, while pointing to India’s low inflation and strong foreign exchange reserves as proof of resilient fundamentals.
Japanese government bond yields rose across the curve as hawkish signals from the Bank of Japan and growing inflation concerns tied to the Middle East war pushed investors to rethink the path of future rate hikes. The move reflects a rapid shift in market expectations, with yields climbing broadly rather than in just one maturity segment.
Even as the RBI has cut the repo rate by 125 basis points in the past year, India’s long-term interest rates have continued rising for months. The gap between policy easing and market pricing is drawing attention, hinting that expectations around inflation, growth risks, and fiscal dynamics may be outweighing the central bank’s near-term stance.
Rising sovereign bond yields are likely to trigger mark to market losses for Indian banks in the March quarter. Even as the RBI conducted open market operation purchases, 10-year government bond yields climbed to a 12-month high, driven by geopolitical risks and persistent inflation worries, pressuring banks’ bond portfolios.
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Harvard economist Jeffrey Frankel says the US faces recession odds about three times the usual level amid Trump’s tariff push. He argues tariffs could mean slower growth alongside higher prices, weaken capital formation, and add uncertainty around the dollar. Frankel also warns that dismantling post-war trade rules could ripple outward, even if some voters still back the plan.
Long-term bond yields are moving higher even after Fed rate cuts, as sticky inflation persists and U.S. deficits swell. Investors are demanding a bigger term premium, nudging markets toward a “higher-for-longer” outlook. With 10-year yields testing key resistance, the repricing could hit mortgages, corporate borrowing, equity valuations, and currency trends worldwide.
India’s benchmark 10-year bond yield is expected to record its largest quarterly rise in four years. Escalating oil prices linked to the Middle East conflict are fanning inflation worries, which could pressure government borrowing costs. Banks may also see margins under strain as markets prepare for a tougher new fiscal year with higher yield expectations.
Indian government bonds fell on Thursday as traders priced in rising economic risk after oil jumped past $100 a barrel amid the US-Iran standoff. Disrupted Middle East shipping is expected to raise inflation pressure and cloud India’s growth outlook. The rupee weakened and stock markets dipped, reinforcing a risk-off mood across markets.
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Even with RBI inflation estimates looking higher, the central message is that rates may stay put. Benign core inflation, a rebound toward double-digit nominal GDP in FY27, and incentives for private capacity building suggest rate action is unlikely to resume soon. The stance points toward a prolonged pause rather than an immediate hike cycle, per the latest analysis.
India’s rupee could slide to fresh record lows, potentially crossing 100 per dollar, if tensions around the Iran war escalate. Analysts warn surging oil prices would deepen inflation pressures and widen the current-account deficit. While central bank steps may cushion the move, they’re seen as temporary—market pricing suggests the rupee has more downside ahead.
Indian 10-year G Sec yields climbed to a near two-year high, ending FY25 at 7.03% even after a policy rate cut. Analysts point to bond oversupply and geopolitical risks tied to West Asia as key drivers. With conflict continuing and supply pressures building, yields could keep an upward bias through FY27, raising inflation concerns.
RBI’s Monetary Policy Committee said a longer West Asia conflict could meaningfully affect India’s growth and inflation, even as the economy stays resilient. Instead of changing policy, it chose a wait-and-watch approach, citing heightened geopolitical uncertainty and a possible El Nino-driven inflation risk.
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India’s bond markets are under pressure after the 10-year yield unexpectedly surged above 7 percent, triggering mark to market losses for banks. The move is spilling into rupee dynamics and heightening trader caution around prolonged conflict and sticky inflation. With government security auctions ahead, markets are pricing in more yield pressure as banks prepare for upcoming supply next fiscal year.
Indian government bonds surged Wednesday, with the 10-year benchmark yield recording its sharpest drop in four years. Investors benefited as oil prices fell after a two-week U.S.-Iran truce, reducing inflation pressure. The rally continued despite the RBI holding its policy rate unchanged, reinforcing confidence in the current monetary stance.
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