G-Sec yields rose on Wednesday, following US Treasury yields, due to higher than expected US inflation

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Government Security (G-Sec/GS) yields edged up on Wednesday, tracking US Treasury yields, which went up as US headline inflation in January rose more than expected.

The yield of the benchmark 10-year G-Sec (7.18 GS 2033) opened higher at 7.13 per cent against the previous close of 7.10 per cent. However, the yield of this paper eased off to close at 7.11 per cent, a basis point higher than the previous close.

“Yields ranged through the day, with mild buying interest seen in late trade,” Nuvama Wealth Management said in its report.

Madhavi Arora, Lead Economist, Emkay Global Financial Services, observed that even as US headlines were up above 3 per cent, core inflation for January 2024 came in much hotter than expected, demonstrating that the last mile of disinflation remains bumpy and pushing out market rate cut expectations beyond May and even June.