US Treasury 10-Year Bond Yield Edges Lower Amid Cooling Hopes for US-Iran Ceasefire Deal

Global Market Sentiment Shifts as US and Iran Agree to Ceasefire Deal

The benchmark 10-year bond yield fell two basis points at the open on May 29, mirroring a decline in global crude prices and a stronger rupee following reports of the US and Iran agreeing to a ceasefire deal. The 10-year bond yield was trading at 6.97 percent, after closing the previous session at 6.99 percent. The markets had been closed on May 28 for Eid.

The agreement between the US and Iran is set to extend the existing ceasefire for 60 days, subject to US President Donald Trump's approval. This development has had a positive impact on global crude prices, with Brent crude falling 1.4 percent to trade near $92 a barrel. The decline in crude prices is expected to have a ripple effect on the Indian economy.

The government is set to raise Rs 28,000 crore through a weekly debt auction, which will dictate the trajectory of yields. Investors will also be keeping a close eye on the Reserve Bank of India's policy meeting next week. A majority of market participants expect the central bank to hold rates steady, although a growing minority expects a hike, according to a Moneycontrol poll.

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The rupee opened 14 paise higher at 95.55 against the dollar, after ending the previous session at 95.69. The strengthening of the rupee is a positive indicator for the Indian economy, which is expected to benefit from the improved global market sentiment.