«So I think, I would look at it not really, you know, coming up very quickly, unless US will come down or maybe we see much softer inflation, which does not look like coming very quickly,» says Jayesh Mehta, BofA.
Let us talk about bond yields specifically. Last week was a bit of a scare when bond deals after the credit policy shot up. And now can bond yields come back to normal levels post the inflation data?
I think currently, what we are seeing is, if you really look at it, general public poll expectation from the RBI on the policy. It was supposed to be a hawkish pause. And that is what RBI actually did. So at that point of time, you did not do any action on the hawkish side, but you did make a couple of announcements that is, 4% is the target, and we might do OMO sales for liquidity purpose, very well clarified in the press conference also. But that also depends a lot on where US yields were. So I think where the US yields were, that is where the market was a little heavy and they did consider that.
And that is where we spiked up. I think it will still now track US yields tomorrow, it does not look like, but if hypothetically, if US will drop down, then definitely we will see some relief there on the bond side.
But as of right now, yes, the market is kind of going and typically we have this, you know, this particular quarter, October, November, December, from a demand perspective, also a little bit weaker historically. And that is where people are just keeping a little bit off the position.
So I think, I would look