Indian government bonds are expected to barely move in early trades on ​Tuesday, as oil prices and Treasury yields remain elevated, even ‌as they did not add to their gains.

The benchmark ​6.48% 2035 bond yield may move in ⁠a 7.10%-7.15% range, a private bank trader said. It had ended at 7.1313% on Monday. Bond prices move inversely to ‌yields.

"Looking at the way oil and Treasuries moved overnight, it is unlikely that we see ‌any major selloff like yesterday, and the key levels ‌are ⁠expected to be protected," the trader said.

Oil ⁠prices eased slightly in Asian hours after U.S. President Donald Trump said he had paused a planned attack on Iran to allow ​for negotiations to end ‌the war in the Middle East.

Trump said on Monday there was a "very good chance" the United States could reach an agreement with Iran to prevent Tehran ‌from obtaining a nuclear weapon, hours after announcing ​the pause in military action to allow talks.

Still, the benchmark Brent crude remained close to $110 ⁠per barrel, a level that is not comfortable for India, which has assumed the average crude basket at $85 per ‌barrel.

Elevated prices could fuel inflation, pressure the rupee, widen the current account deficit and complicate the government's fiscal calculations for India, which imports nearly 90% of its crude requirements.

Meanwhile, U.S. Treasury yields eased marginally, but the 10-year yield stayed near 4.60% handle amid a global ‌market selloff in longer-dated bonds driven by war-related inflation concerns.

Futures showed a ​47% probability that the Federal Reserve will hike interest rates in December, while bets on any ⁠further rate cuts have been ruled out.

RATES

India's overnight index swap ⁠rates are expected to search for directional cues, after witnessing heavy paying in the previous session.

The ‌one-year swap ended at 6.31%, while the two-year rate ended at 6.55%. The five-year rate closed at 6.85%, ​after hitting a 31-month high on Monday.

Published on May 19, 2026