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Bond Yield Drags To 2.5 Year Low Of 6.284% After US Tariff Threat Weighs On Crude Price


After the US President Donald Trump threatened to levy additional tariff on Chinese goods, the price of crude oil in the global markets headed southwards and on its back the benchmark bonds rallied in trade. Bond prices and bond yield move in opposite direction.

Bond Yield Drags To 2.5 Year Low Of 6.284%

So, while the bond prices are increasing, the yield on benchmark 10-year government bonds has fallen to levels last seen in December 2016 of 6.284%. In bond markets, the yield at the close in Tuesday's trading session stood at 6.433%.

The bond market in India is already seeing prices surging higher as there are likely expectations on the rate cut front, lower target for fiscal deficit and government's plans to finance its debt from overseas markets. Bond yield in 2019 so far has fallen by more than 100 bps. 1 basis point is one-hundredth of a percentage point.

Story first published: Wednesday, July 17, 2019, 11:09 [IST]
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