Indian government bonds remained largely flat Friday as heavy supply of the benchmark 10-year note weighed on sentiment.

Indian government bonds remained largely flat Friday as heavy supply of the benchmark 10-year note weighed on sentiment. New Delhi's 340-billion-rupee auction is expected to conclude at higher yields as traders demand increased risk premiums. A fragile U.S.-Iran ceasefire continues to threaten oil prices, creating significant headwinds for India's economic outlook. As an importer of nearly 90 percent of its oil, India faces substantial vulnerability to prolonged supply disruptions. Shipping through the Strait of Hormuz remains critically constrained at below 10 percent of normal volumes, disrupting global oil supply by approximately 20 percent. The benchmark 10-year yield is tracking its largest weekly decline since February 2022, though overnight index swap rates eased lower as liquidity conditions improved temporarily following the ceasefire's second day of holding.