Overview

• India’s 10-year government yield closed at 6.5967%, the highest since March 27, after last week’s 15-basis-point jump marked the biggest weekly rise in over three years.
• Top-rated three-year corporate note yields climbed 26 basis points in two days, the steepest weekly move since November 2022, raising the risk of costlier funding for companies.
• Market participants cite concern that GST rationalisation could cut revenue and require larger sovereign borrowing, with dealers also reporting muted demand from long-end buyers and foreign investors.
• Federal Reserve Chair Jerome Powell’s hint at a possible U.S. rate cut offered brief relief to Indian bonds, but traders largely rule out further RBI rate cuts this year.
• A state ministers’ panel has backed a two-rate GST structure of 5% and 18% in place of 12% and 28%, with the GST Council set to discuss the plan on September 3–4 as investors watch for clarity.