📈 Bond Yields Decline as Geopolitical Tensions Ease

The secondary bond market saw a strong relief rally late last week, driven by optimism over a potential US-Iran deal which pushed Brent crude prices below $ 100 per barrel. This shift significantly improved risk sentiment and lowered inflation concerns in the domestic market. • Secondary Bond Market Movements Yields declined sharply across the curve with higher transaction volumes: • 2026 Tenors: 01.08.26 fell from 8.32% to 8.20%. • 2028 Tenors: 01.07.28 dropped from 9.80% to 9.65%. • 2030-2032 Tenors: 01.07.30 eased to 10.15% while 01.10.32 hit a low of 10.70%. • Long-term (2034): 15.06.34 traded down from 11.31% to 11.15%. • Treasury Bill Auction & Liquidity • T-Bill Rates: Yields stabilized at last week's auction. The 91-day and 364-day tenors remained at 8.20% and 8.52% respectively, while the 182-day fell 1bp to 8.24%. • Money Market: Liquidity surplus rose to Rs. 253.66 Bn from Rs. 218.70 Bn. • Bond Auction: A major Rs. 250 Bn T-Bond auction is scheduled for May 12 across four maturities. • External Sector & Forex • Foreign Holdings: Recorded a net outflow of Rs. 1.47 Bn, reducing total holdings to Rs. 142.73 Bn. • Currency: The Rupee depreciated slightly, closing at Rs. 321.75/85 against the USD compared to the previous week's Rs. 319.75/320.00. _Note: Summary based on provisional market data for the week ending May 8, 2026._