India's 10-Year Bond Yield Edges Up Following Release of Inflation Figures

India's 10-Year Government Bond Yield Sees Slight Increase Amid Inflation Data

India's benchmark 10-year government bond yield opened marginally higher on May 13, following the release of retail inflation data that came in slightly above the previous month's reading.

At 9:05 am, the benchmark 10-year bond yield was trading at 7.05 percent, a slight increase from its previous close of 7.04 percent. This comes after India's consumer price inflation stood at 3.48 percent in April, compared to market expectations of 3.72 percent and a decrease from 3.40 percent in the previous month.

In the previous session, India's 10-year government bond yield rose to a five-week high due to fading hopes of a $-Iran peace agreement and rising crude oil prices. The benchmark 6.48 percent 2035 bond yield settled at 7.0458 percent on Tuesday, its highest level since April 7 and up 1.4 basis points from Monday's close. Additionally, the yield on the new 10-year 6.94 percent 2036 bond rose 2 basis points to 7.0033 percent.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The increase in bond yields was also influenced by global economic developments. The dollar index climbed to 98.30, following a significant gain in consumer inflation in the US, which recorded its biggest gain in three years amid broad-based price increases. Other market factors, including the start of refund payments linked to import duties imposed during the Trump administration, also contributed to the market's performance.

Geopolitical tensions in the Middle East remained elevated, with Saudi Arabia reportedly launching covert attacks on Iran and Iran tightening its grip over the Strait of Hormuz. Meanwhile, President Donald Trump visited China, amid pressure over tariffs and the Iran conflict.