10-year yield seen slipping to 6.64% as Fed bets ease

Indian government bond yields are expected to ease further to around 6.64%-6.65%, driven by softer-than-expected US non-farm payrolls data of 57,000 jobs in June which has reduced rate hike expectations from the US Fed. The potential inclusion of Indian sovereign bonds in the Bloomberg index and retreating crude oil prices are additional supportive factors. The benchmark 10-year yield has already declined 7 basis points over the past three sessions, settling at 6.69% on Tuesday, with long-term targets of 6.50% if Bloomberg inclusion materialises.