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Government Security Market Update:

Strong Q2 growth numbers triggered the selling in the Indian bond market as it cast doubts on whether the central bank will deliver a rate cut next week. India's economy grew 8.2% year-on-year in July-September, accelerating from the 7.8% in the previous quarter, driven by strong consumer spending and manufacturing. A Reuter’s poll had forecast a 7.3% expansion for the period when the U.S. imposed an additional 25% punitive tariff on Indian exports, raising the total levy to 50%. The benchmark 6.33% GS 2035 yield ended at 6.5463% on Friday, up from 6.5082% in the previous session. Earlier, in a week the dovish statement from the RBI Governor has boosted the sentiments and most of the market participants were expecting a 25bps rate cut from the RBI MPC when they will meet during December 3-5, 2025. India's overnight index swap rates rose as stronger growth data reduced the possibility of an immediate rate cut. The one-year OIS ended at 5.46%, while the two-year swap closed at 5.47%. The five-year rate settled at 5.76%. The fourteen states sold 4 to 30 years loan in the range of 6.56 to 7.51% and in the Treasury bill auction the Reserve Bank of India sold 91; 182 & 364 DTB at a yield of 5.3633; 5.5244 & 5.5347% respectively. In a weekly auction the government sold 5.91% GS 2028; 6.28% GS 2032; 7.25% GS 2055 & 6.98% GOI SGrB 2054 at a yield of 5.7808; 6.4343; 7.2875 & 7.2094 percent respectively. The yield on the 6.48% Government bond due Oct. 2035 rose to 6.5063% from 6.5172% last week.

Global Debt Market Update:

The yield on the 10-year Treasury note moved downward this week: it dropped to around 3.96% as of Nov 28, 2025. The drop in yields was supported by growing market expectations of a potential rate cut by the Federal Reserve. The yields moved higher from the low on Friday as the world's largest exchange operator suffered an outage that halted futures trading. Global futures trading was disrupted for hours on Friday after the outage - one of CME's longest in years halted activities across stocks, bonds, commodities and currencies. On profit booking the yields have inched higher from the day's low of 3.96% and managed to close at 4.02%. The closely watched yield curve comparing two and ten years steepened slightly to just over 52 basis points, in anticipation of another 25 bps rate cut from the Federal Reserve in December policy review. In November series, the treasuries posted gains across the curve and 10-year yields corrected by 8 bps, while 2 and 5-years declined by 11 and 12 bps respectively and 30-years closed 2bps up from the last month

Bond Market Ahead:

After the release of the strong Q2 GDP data the selling across the curve was intensified and the new 10-year benchmark 6.48% GS 2035 moved above 6.50% and closed around 6.51%. The market will take a breath here and the yield will move in the tight range from 6.48 to 6.52% till the RBI Monetary policy deliberation on December 5, 2025. If RBI MPC deliver a rate cut with dovish tone the market will move higher and we may see the yields easing below 6.40% and will head towards 6.32% but if due to strong GDP numbers the RBI takes a pause the yields will not hold at the current levels and may head above 6.60% and stabilize around 6.65 mark. The spread has widened at the record levels and the longer end segment is trading above 90 bps to the 10-year benchmark and positive policy outlook will help in narrowing the spread to 60bps. The state loan auction is scheduled for Rs.31,350 crore which is higher compared to the previous few weeks and we may see the yields moving higher and most of the states may inched above 7.50%. Given the combination of historically low inflation at 0.25% in October, repeated downward surprises on price growth and public comments from senior RBI officials suggesting room for easing repo rate by another 25 bps to 5.25%. The traders at U.S. Treasury also expecting Fed to eased rates further by 25 bps in December policy review and the 10-year Treasury yield dropped to 3.96% on Friday and closed at 4.01% due to some technical outage.

Bond Strategy:

* Buy 6.48% GS 2035 around 6.52 to 6.53 with a target of 6.47% and a stop loss of 6.56%

* Buy 7.24% GS 2055 around 7.31 to 7.32 with a target of 7.27% and a stop loss of 7.35%

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