Bearish sentiment rises in the Indian bond market as benchmark yields approach the 6.90% threshold

⑴ Short sellers of Indian government bonds anticipate the benchmark yield will rise further, primarily because the US is about to announce a new round of sanctions against Iran, which may further disrupt Middle East oil supply and push up energy prices. ⑵ The benchmark bond yield rose about 2 basis points on the day to around 6.87%, hovering near a key technical resistance level. Primary dealer traders indicated that if Brent crude oil breaks above $95 per barrel and approaches $100, bulls will find it difficult to hold the defense line around 6.89% to 6.90%. ⑶ Brent crude oil is currently trading near $93 per barrel, and with New Delhi scheduled to auction the benchmark bond on Friday, supply pressure is further weighing on prices and yields are facing upside risks.