By -
Jul 21, 2014
India’s 10-year bonds advanced and
the rupee gained as a pickup in monsoon rains eased concern
inflation will accelerate.
The shortfall in the June-September monsoon, which accounts for more than 70 percent of India’s annual precipitation, was 34 percent of the 50-year average, the weather department said July 18. That compares with 43 percent on July 11. A weak start to the monsoon has delayed the planting of some crops, threatening to push up food costs that account for about half of the consumer-price index.
“Some optimism is creeping into the markets on account of the improvement in rains,” Killol Pandya, a Mumbai-based senior fixed-income fund manager at LIC Nomura Mutual Fund Asset Management Co., said by phone. “Still, that isn’t a game-changer and we need to keep an eye on the geopolitical risks being fueled by conflicts in other parts of the world.”
The yield on India’s sovereign notes due November 2023 fell two basis points, or 0.02 percentage point, to 8.75 percent as of 10:21 a.m. in Mumbai, according to the Reserve Bank of India’s trading system.
The rupee rose 0.1 percent to 60.2050 per dollar, its first gain in six days. It capped its biggest weekly loss in a month on July 18 as the prospects of higher U.S. interest rates and conflicts in the Middle East and Ukraine hurt demand for riskier assets.
One-month implied volatility in the rupee, a gauge of expected swings used to price options, rose five basis points, or 0.05 percentage point, to 6.57 percent, data compiled by Bloomberg show. Three-month offshore non-deliverable forwards gained 0.1 percent to 60.98 per dollar. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in the U.S. currency.
One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, were unchanged at 8.41 percent, data compiled by Bloomberg show.
To contact the reporter on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Robin Ganguly, Anil Varma
The shortfall in the June-September monsoon, which accounts for more than 70 percent of India’s annual precipitation, was 34 percent of the 50-year average, the weather department said July 18. That compares with 43 percent on July 11. A weak start to the monsoon has delayed the planting of some crops, threatening to push up food costs that account for about half of the consumer-price index.
“Some optimism is creeping into the markets on account of the improvement in rains,” Killol Pandya, a Mumbai-based senior fixed-income fund manager at LIC Nomura Mutual Fund Asset Management Co., said by phone. “Still, that isn’t a game-changer and we need to keep an eye on the geopolitical risks being fueled by conflicts in other parts of the world.”
The yield on India’s sovereign notes due November 2023 fell two basis points, or 0.02 percentage point, to 8.75 percent as of 10:21 a.m. in Mumbai, according to the Reserve Bank of India’s trading system.
The rupee rose 0.1 percent to 60.2050 per dollar, its first gain in six days. It capped its biggest weekly loss in a month on July 18 as the prospects of higher U.S. interest rates and conflicts in the Middle East and Ukraine hurt demand for riskier assets.
One-month implied volatility in the rupee, a gauge of expected swings used to price options, rose five basis points, or 0.05 percentage point, to 6.57 percent, data compiled by Bloomberg show. Three-month offshore non-deliverable forwards gained 0.1 percent to 60.98 per dollar. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in the U.S. currency.
One-year interest-rate swaps, derivative contracts used to guard against swings in funding costs, were unchanged at 8.41 percent, data compiled by Bloomberg show.
To contact the reporter on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Robin Ganguly, Anil Varma
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