The yield on the benchmark 10-year bond in India is expected to trade between 6.30% and 6.33% after the RBI announced another cash withdrawal, with the five-year bond ending at 6.0025%.
India's annual retail inflation dropped to a more than six-year low of 2.10% in June, lower than economists' estimates, while core inflation excluding volatile items was at 4.4%-4.5%.
The RBI will conduct a three-day variable rate reverse repo auction for ₹1 lakh crore and G-Secs yields remain sticky despite ample liquidity in the banking system.
India bonds are flat ahead of the country's and the US's inflation data, with the expectation of paying pressure on liquidity withdrawal in the OIS rates and the impact of elevated US yields.