Another Auction Devolved On Primary Dealers

A rise in goods and services tax collections for July could provide a boost to Indian assets including bonds, India Gross GST Collections came in at INR 1.16t in July, up from INR 928.5bn in June.

• Bonds could come under some pressure today after another auction was rescued by primary dealers; of the INR 110bn of the 5.63% 2026 bond dealers took INR 74.7bn. The 5.63% 2026 line also suffered a weak auction on July 2 and INR 104bn of INR 110bn sold was devolved on primary dealers. This has led commentators to speculate that the RBI is targeting the 5-Year and 10-Year sector to anchor the rest of the curve.
• Later in the session markets await Indian manufacturing data. Looking further ahead the RBI meet this week and will announce policy settings on Friday. The Central Bank are expected to mention the recent rise in yields with the 10-Year yield up 16bps in July, though RBI Governor Das has insisted that recent inflation readings are only "a transitory hump."