US Treasury yields on most maturities rose overnight as investors prepared for an earlier-than-expected interest rate hike
The benchmark 10-year bond yield was trading at 6.54%, after touching 6.55% in early trade, its highest since Jan. 31, 2020
Shorter-maturity bonds in these funds get reinvested at higher coupon rates
The benchmark 10-year yield will climb to 6.40% by December, while the five-year yield will increase to 5.90%
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Investors, they say, need to keep a tab on how the US treasury yields move, which in turn will have a ripple effect on how big money moves across developed (DMs) and emerging markets (EMs)
Progress on the $1.9 trn U.S. stimulus bill has offered little respite, as higher yields have threatened gold's appeal as an inflation hedge by increasing the opportunity cost of holding bullion
After being relegated to the second spot in the previous two fiscal years, China again became India's biggest trading partner in the first nine months of FY21. Read top stories with Business Standard
Indonesia's 10-year bond yield climbed three basis points on Wednesday to 6.89%, after India's slid 18 basis points the previous day to 5.94%
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Some market participants say there is still room for upside for long-duration products
Global drivers are also supportive as US yields harbour expectations of a dovish US Fed and a likely rate cut at the meeting later this month
Foreign investors have slowly started liquidating some of their holdings in local debt paper, as rising bond yields and the rupee's weakening bias make their investment not lucrative enough at a time when the US economy shows early signs of recovery.It is not that they are liquidating en masse; utilisation of their permitted limits show there is very little space left to invest. And, this is also a threat for local investors. In February, foreign portfolio investors (FPIs) sold $421 million in debt; in March so far, they have sold $133 mn. However, in January, they had bought $1.5 billion in debt.FPIs have exhausted 96.66 per cent of their permitted investible limit of Rs 1.913 trillion in government debt. In the case of corporate debt, they have exhausted 99.8 per cent of their limit of Rs 2.253 trn.However, the sell-off in February should not be seen as an arbitrary case. It could, say bond market experts, be seen as a precursor of things to come. Here's why:For a foreign investor, .