India Swaps Turn More Aggressive on Rate Hikes, Boosting Yields

India's swap markets are pricing a more aggressive path of interest-rate increases as oil prices surge, signaling prospects for further gains in government bond yields. The hawkish repricing raises the risk of higher borrowing costs and downward pressure on bond prices, warranting adjustment to positioning in Indian fixed income and emerging-market exposures.

Analysis

India's swap markets are pricing a more aggressive path of interest-rate increases as oil prices surge, signaling prospects for further gains in government bond yields. The hawkish repricing raises the risk of higher borrowing costs and downward pressure on bond prices, warranting adjustment to positioning in Indian fixed income and emerging-market exposures.