India's 10-year bond yield scales over 2-month peak ahead of Warsh speech

MUMBAI: Indian government bonds extended losses on Friday, keeping the 10-year yield at a more than two-month high, as traders braced for Federal Reserve Chair Kevin Warsh’s first Jackson Hole address. Global markets will parse Warsh’s remarks later in the day for signals on the U.S. policy path and inflation strategy. His comments could recalibrate expectations for Indian rates after hawkish minutes from the Reserve Bank of India’s August meeting revived bets on domestic monetary policy tightening. “Warsh’s speech will be crucial. His words will determine the market’s likely direction,” said Gopal Tripathi, head of treasury and capital markets at Jana Small Finance Bank. India’s benchmark 6.94% 2036 bond yield breached the key 6.90% mark to end at 6.9108% on Friday, its highest since June 11. The yield is unlikely to rise above 6.95% unless Warsh delivers an unexpectedly hawkish message, Tripathi said. Rising yields have widened the premium over U.S. Treasuries, bolstering the appeal of higher-yielding Indian debt. The spread between the U.S. 10-year yield and India’s benchmark yield widened to 224 basis points earlier on Friday, its widest in nearly two months, from a one-year lo