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Fixed Income

Market Watch on a Rough Fixed Income Day

Fixed Income Markets are hurting big time. Here’s a quick update at 12 noon.

  • Call money (overnight interbank) is at 9.25%
  • RBI repo was about 33,263 cr. This is below the limit of around 38,000 crores.
  • CBLO markets (interbank borrowing) are at 8.50%
  • CD market at 11% [+2%] (Certificates of Deposit = <1 year wholesale borrowing by banks). That’s for a five day CD. Further out towards 1 year, rates are 10%.
  • Government Securities trade at 8.38% (2023), yields are up 20 bps. (0.2%). The 2026 has gone to 8.57% (again, 20 bps up).
  • 5 year corporate bonds are trading at 10%, which is about 0.50% higher than yesterday.

And Bank Stocks are, to put it mildly, screwed. The Index is down 5% for the day, and Yes bank is the worst hit at -10%.

(Why? See this)

Here’s the bank stock performance since before the RBI liquidity squeeze (July 15).

Bank Stocks Change from July 15

And then, like they say in a ghazal, forward-forward see, happens what.

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