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Monday, September 26, 2022

India IRS Review: End unchanged on lack of significant cues

Informist, Friday, Jul 15, 2022


By Shubham Rana


NEW DELHI – Overnight indexed swap rates ended unchanged today as traders avoided large bets due to lack of significant cues on interest rates, dealers said.


The one-year overnight indexed swap rate settled at 6.35%, flat against Thursday. The five-year swap rate ended at 6.54%, against 6.55% the previous day.


Amid lack of firm domestic cues on interest rates, traders have been looking at global factors to take positions in swaps.


“Crude and US yields haven’t moved too much today, so there are no big triggers,” a dealer at a private bank said.


Traders paid higher fixed rates on Thursday after the US CPI print for June came in above expectations at 9.1%. After a record-high inflation reading in the US, global investors were of the view that the US Federal Reserve may hike policy rates by 100 bps at the end of July.


However, comments by Fed officials prompted traders to pull back on the idea of a 100-bps interest rate hike later this month, which prevented a rise in OIS today, dealers said.


The OIS curve has flattened this month, with the difference between the five-year OIS and the one-year OIS at 19 bps today, against 53 bps at the end of June.


“The lack of cues today prevented any large moves but crude rose after the trade closed,” a dealer at a primary dealership said. “Had the Brent crude topped $101 per bbl during the day, I am sure the OIS would have reflected that.”



Swaps are not traded on Saturdays.


On Monday, swap rates are seen steady amid lack of significant domestic cues on interest rates.


Any movement in US Treasury yields and crude oil prices may lend cues when the market opens.


Traders may look to pay fixed rates, particularly in the one-year and two-year OIS on view that the Reserve Bank of India may hike rates more aggressively than anticipated before.


The swap rate in the one-year segment is seen at 6.20-6.55%, and the five-year at 6.45-6.70%.



At 1530 IST


1-year OIS



2-year OIS



5-year OIS



2-year MIFOR


5-year MIFOR





US$1 = 79.88 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Avishek Dutta


For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.


Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.


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Source: Cogencis

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