Indian government bonds extend gains as the lower-than-expected June inflation print spurs hopes of a rate cut by the RBI at its July 31 meeting. The benchmark 8.15% 2022 bond is at 100.65 vs 100.48 before the data and 100.35 at Friday's close. A dealer with a private bank says, manufacturing products inflation, at 5%, is in line with estimates, but food inflation remains in double digits, which is a worry. Given that a rate decision will also depend heavily on the progress of the monsoon, the gains may not hold, he says. He tips the benchmark yield in a 8.05%-8.10% near-term band. It is last at 8.05%. India's WPI rose 7.25% on-year in June vs the 7.6% median estimate in a Dow Jones poll. The April print is revised upwards to 7.50% from 7.23%.
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