The benchmark 10-year US Treasury yield neared 5% in Asian trade after October consumer-price data outstripped forecasts, spurring traders to ramp up bets on a larger Federal Reserve rate increase in December.
Markets await India's October inflation reading later in the day, with a Reuters poll forecasting annual consumer inflation at 5.93%, up from 5.54% in September. An upside surprise could entrench expectations of further RBI tightening next month.
Indian government bonds are anticipated to trade between softer oil prices and rising US yields. The market is waiting for domestic inflation data that could influence the Reserve Bank of India's rate strategy. A Reuters poll estimates an increase in annual consumer inflation, potentially leading to further tightening by the RBI. Investors are cautious ahead of a significant bond auction scheduled for Friday.
Softer crude may provide some relief. Brent fell 1% in Asian trade to $91.80 a barrel, easing pressure on oil-importing India's inflation outlook, currency and public finances.
The benchmark 6.94% 2036 bond yield is expected to move between 7.18% and 7.23%, according to a private-bank trader. It ended…