India bonds recover on softer US rate outlook; oil risk caps gains

Indian government bonds recovered as softer US inflation data reduced expectations of a Federal Reserve rate hike in July, with the probability falling to 17% from 42%. The benchmark 6.94% 2036 bond yield settled at 6.7738% after touching a three-week high of 6.7945%. However, rising Brent crude above $85 per barrel amid Strait of Hormuz supply concerns and elevated US 10-year yields above 4.60% capped gains, while traders await greater clarity on the inflation trajectory before the MPC defines its policy course.