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Weekahead: Debt/fx markets await factory data, new 10-year bond

by FP Staff  May 5, 2013 11:30 IST

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Reuters Market Eye - Indian bond markets are expected to turn their attention to new data and supply next week after the Reserve Bank of India (RBI) cut the repo rate by 25 bps as widely expected, but said there was limited room for further easing.

The RBI also lowered banks' held-to-maturity bond ratio to 23 percent from 25 percent, to be implemented from the June quarter in instalments of 50 bps each.

A dealer at a state-run bank says the sentiment remains cautious but bullish in anticipation of a new 10-year bond in the next couple of weeks.

He expects the 10-year yield to move in a 7.65-7.80 percent band next week, with the new 10-year cutoff expected around 7.57 percent levels.

India's factory output data for March and last fiscal year will be watched on May 10.

USD/INR expected to trade in a 53.70-54.50 band next week, with an upward bias.

KEY EVENTS/FACTORS TO WATCH

Sat/Sun: Asian Development Bank conference

Mon: March Services PMI

Fri: March factory output data.

(Reporting by Subhadip Sircar)