US 10-Year Treasury Yield has surged above 5%, touching around 5.26%, while Japan’s 10-Year Government Bond Yield is at its highest level in nearly 30 years. Rising global bond yields are creating pressure on liquidity, foreign investment flows and emerging markets like India. In this video, we explain how higher US and Japan bond yields could impact FII flows, the Indian stock market, rupee, crude oil prices and the bond market. We also discuss whether global investors may shift capital towards developed markets, the outlook for Nifty, the impact on gold and silver, and what the RBI may do to manage currency and liquidity pressures.
US 10-Year Treasury Yield 5% के पार पहुंचकर 5.26% तक चला गया है, जबकि Japan की 10-Year Bond Yield भी करीब 30 साल के high पर है। Global bond yields में इस तेज बढ़ोतरी का असर India के equity market, bond market, rupee और foreign investment flows पर देखने को मिल सकता है। इस वीडियो में समझिए कि US और Japan में बढ़ती bond yields से FIIs के लिए India जैसे emerging markets कितने प्रभावित हो सकते हैं। साथ ही जानिए महंगे crude, कमजोर rupee और higher global yields का Indian economy और markets पर क्या असर पड़ सकता है। क्या FIIs की selling आगे भी जारी रह सकती है? India को foreign capital attract करने के लिए किन factors पर ध्यान देना होगा? Higher yields का Nifty, gold, silver और corporate borrowing cost पर क्या असर होगा? और अगले 1–2 quarters में market के सामने कौन-से key risks रहेंगे?
#BondYield #FII #IndianStockMarket #Nifty #Rupee #CrudeOil #Gold #RBI #BondMarket #StockMarket
~HT.410~PR.474~ED.472~GR.506~VG.HM~
US 10-Year Treasury Yield 5% के पार पहुंचकर 5.26% तक चला गया है, जबकि Japan की 10-Year Bond Yield भी करीब 30 साल के high पर है। Global bond yields में इस तेज बढ़ोतरी का असर India के equity market, bond market, rupee और foreign investment flows पर देखने को मिल सकता है। इस वीडियो में समझिए कि US और Japan में बढ़ती bond yields से FIIs के लिए India जैसे emerging markets कितने प्रभावित हो सकते हैं। साथ ही जानिए महंगे crude, कमजोर rupee और higher global yields का Indian economy और markets पर क्या असर पड़ सकता है। क्या FIIs की selling आगे भी जारी रह सकती है? India को foreign capital attract करने के लिए किन factors पर ध्यान देना होगा? Higher yields का Nifty, gold, silver और corporate borrowing cost पर क्या असर होगा? और अगले 1–2 quarters में market के सामने कौन-से key risks रहेंगे?
#BondYield #FII #IndianStockMarket #Nifty #Rupee #CrudeOil #Gold #RBI #BondMarket #StockMarket
~HT.410~PR.474~ED.472~GR.506~VG.HM~
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NewsTranscript
00:04Hello and welcome, I am with you, I am with you, I am with you, I am with you.
00:08Share market is panicked, commodity markets is panicked, global markets are panicked,
00:14and the FIIs are outflowed from the bazaar.
00:19These are some headlines you will see in the bazaar, you will hear in the news reports,
00:26behind it is a lot of current. Crude will increase, global tensions will not stop,
00:34in the US and Iran will not make a pact and a leader will fight,
00:39and along with the bond market.
00:42In this video, we will try to understand the bond market,
00:46because the US's 10-year treasury yield is almost the highest level of 2007.
00:55It is 5.26% of the US's 10-year treasury yield.
00:59If Japan's 10-year GDP yield is about 30 years,
01:04what is the highest level of bond market?
01:06What is the highest level of bond market?
01:10Is it the highest level of bond market?
01:14Or is it the highest level of bond market?
01:33Is it the highest level of bond market?
01:36Is it the highest level of bond market?
01:51Is it the highest level of bond market?
01:57So we are doing a lot of the crude discussion about what problems are due to crude, but the elephant
02:06in the room is looking for the bond market for the Indian share markets and the global markets.
02:12What is going on in the bond market, which has so much stress created and the Indian market is so
02:19panicking.
02:22So, Anima has a correct question.
02:27What is happening in the past few days, the U.S. bond return, the 10-year bond return is almost
02:355% plus, which was around 2-3% range.
02:40This means that the U.S. bond is safe in the whole world.
02:46Every investor has less than 2-3% return.
02:51In the same paper, you can understand that it is 5% plus return.
02:55Because of that, what is happening in the global flows of capital?
03:02Because of the global flows of capital U.S. bond, across the countries, there is a shortage of liquidity and
03:10foreign inflows.
03:12Right?
03:12So step number one is that you can see all the effects.
03:16Yes.
03:18This is coupled with crude prices.
03:21They are increasing.
03:22They are increasing.
03:23Inflationary pressures are increasing in countries.
03:26Especially in India.
03:29The combination of these two, which we are seeing in the market, this is happening.
03:33The return of the U.S. is almost 2004-2006-2007.
03:39In that period, it was 5% range.
03:41In the last 20 years, this is the highest return, which is the highest return.
03:46Hmm.
03:47Okay.
03:48In 2007, it is true.
03:50We have also released reports.
03:52According to the U.S. 10-year Treasury yield 5.26%
03:57which is the highest level after 2007.
04:00But the U.S. bond deal is panicked.
04:02Because according to data, Japan's 10-year JGB yield is 30 years in its highest level.
04:10So, is there a pressure on the global bond deals on the market?
04:15Yes.
04:16You said the correct point.
04:18What was the last 20-25-30 years?
04:20Everyone used to have cheap capital from Japan and Germany.
04:25So, Germany has added.
04:27Right?
04:28And what happened over the last few years?
04:31Japan's yield is almost 3% which is almost zero.
04:34Right?
04:36Because Japan's yield has gone,
04:38So, the capital inflow across the world is going back to the home country.
04:43Yeah.
04:44You know the investors of that particular country,
04:47they come from the country's papers to understand better.
04:49And because it's developed economy, it's less risky.
04:52So, if someone compares to India,
04:55then there is a risk premium for developing economy.
04:58And then there is a risk premium for currency hedging.
05:00And then there is a risk premium for currency hedging.
05:02So, all of this,
05:03the inflows are reduced.
05:04Um.
05:05That you need to have to take the price,
05:08to compare the United States.
05:13In the EU,
05:15that we are more than just the US.
05:17Mhm.
05:18So,
05:18with your current income,
05:29we are still at 7.1,
05:307.2.
05:31So,
05:43So sir, understand this global bond sell-off and if this is a global bond sell-off, what is the
05:49impact of the bond market?
05:51The share market is in pressure. Commodities are also in pressure, but how is the situation in India?
05:59India's bond market is definitely a pressure, because it will be tough for us.
06:05If you understand that the U.S., Japan and developed economies of bond yields will be more and more,
06:11then the investors will be less. Basically, the portfolio will be reallocation.
06:17The paper is the most safe, which will be given to you.
06:22So what do you do if you put the money into India, then you put it in the portfolio.
06:27In a simple way, this is happening.
06:29Now, because capital inflow is low as a country, we have to become attractive to get more inflows.
06:37Now, the way we can become attractive is that if the spread is increased, then the pressure is on our
06:42economy.
06:43And if we talk about equity markets, then the equity markets,
06:51the investors will be better in the world.
06:53So that the value of the profits will be less and more.
06:56So we have to become the profits and the growth of capital,
06:59So the profits on earnings of the company,
07:02and the countries also become the level of performance pressure.
07:06That if you have to be more capital,
07:08then you have to be more benefits and better returns.
07:12So, if you compare the U.S. to Japan, where are the bond market standing from India?
07:22No, we can't know about the direct comparison standing.
07:26What is happening today?
07:27Basically, because of the global uncertainties and inflation,
07:32the bond yields are up.
07:35If I talk about spread, I have explained that
07:38although the U.S. bond return almost two times,
07:432.5% to 5% to 5%,
07:46but it's not that it's 6% to 12%.
07:49It's 7.2%.
07:52So, spread, we have been able to maintain the spread,
07:57I would say.
07:59Because one is a relative comparison to the U.S.
08:24but it's not the only reason,
08:26it's not the only reason,
08:26it's not the only reason.
08:27Basically.
08:28Okay.
08:29Sir, equity market,
08:30there's a pressure on the bond deal,
08:32that the FII's outflow has increased.
08:36The FII's is getting out of the Indian market.
08:39When are we going to the FII's?
08:42This is a very big question.
08:43But by the way that the global bond sell-off is showing,
08:46what can the FII's in the near future
08:49that the FII's can go out of India?
08:52And in today's situation,
08:55there are two-three reasons.
08:56One is the bond yield reason.
08:57The other is the weakening of rupee versus dollar.
09:00That's also a big reason for FII's to go out of India.
09:03Okay.
09:04So, I think as a policy,
09:06obviously, we have to protect our yield.
09:09Okay.
09:10But also, we have to make our currency attractive equally.
09:13Okay.
09:14To ensure that FII's continue in our economy,
09:19capital pour.
09:21In addition to that,
09:22if we can give good earning results quarter on quarter,
09:26I think that will also result in getting good amount of FII
09:30into the country.
09:31So, I think these three things
09:33will have to go simultaneously so that we can get FII's inflow.
09:38So, if we look at the short term,
09:41then the FII's will be a little bit difficult.
09:45I would say so.
09:46Because today,
09:47the U.S. yield is better.
09:49In Japan, the yield is higher.
09:51Our relative spread is less.
09:54Okay.
09:55The rupee is a little bit weak.
09:58But,
09:59if we can manage this in the next two quarters,
10:01then we will definitely see FII inflows.
10:06Okay.
10:07Sir, you have talked about the rupee of the weakening.
10:09The rupee of the pressure is also somewhere
10:11like you mentioned.
10:14With that,
10:15the higher U.S. yield combination is more pressure on the rupee.
10:20What can it say?
10:21The RBI is also pressure on this situation.
10:24It is necessary to deal with this situation.
10:25Definitely.
10:26Look, there are two things,
10:27as you mentioned,
10:28that the higher U.S. yield and capital outflow has happened.
10:32It is pressure.
10:33In addition to this,
10:35the war in the Middle East,
10:37which is very expensive,
10:38it is very expensive.
10:40For India,
10:41as a factor,
10:43it is also a big factor.
10:47Basically,
10:48the difference of the U.S. rupee,
10:49is also a big factor.
10:52So,
10:52the three things,
10:53I think,
10:54the volatility will keep moving.
10:58But,
10:59more important,
11:00the equation,
11:01dollar strength plus oil
11:03plus capital,
11:04the three things,
11:05how will it combine?
11:06It will determine,
11:08that the rupee on the pressure.
11:10When will it impact on the rupee?
11:13You are saying,
11:14that the situation will not be normalized.
11:16The pressure will be built up.
11:18But,
11:18where will the rupee go?
11:20Where will it go?
11:22No.
11:23As you saw,
11:24RBI had many steps.
11:27The FNR deposit in our country.
11:30There was a spot market intervention.
11:32RBI has many tools,
11:36to manage rupee dollar spread,
11:40and rupee dollar pricing.
11:42So,
11:43I don't think,
11:44it will go very much.
11:45But,
11:45definitely,
11:45the pressure will remain.
11:47Okay.
11:48RBI is also going to come.
11:49When we talk about this,
11:51we will discuss this.
11:52What is the expectation?
11:54The rate hike has already.
11:56Is RBI also going to be pressure on the other policy?
12:02As I said,
12:04As I said,
12:04the spread of US bond and Japan bond,
12:08it is lower.
12:09As compared to the 20 years ago,
12:11when it was at the peak of US bond.
12:14So,
12:15there will be pressure to attract some more.
12:18From a pricing perspective.
12:20Okay.
12:21But,
12:21I don't think,
12:22directly,
12:23just because the US has increased,
12:24it will continue.
12:27You know,
12:29with time,
12:30you have to look at RBI
12:31and what other policies.
12:33Like,
12:34RBI has a good FNR deposit.
12:36We got almost $100 billion inflows.
12:38Right.
12:39So,
12:39there are other tools,
12:40they have given other steps.
12:41That will also determine,
12:43the spread will remain in the range.
12:46But,
12:46there will definitely be pressure on the RBI
12:52to attract foreign inflows.
12:55And,
12:56how can you do that?
12:57What are you expecting?
12:58Hawkish commentary,
12:59once again?
13:01No.
13:02The commentary,
13:03I think,
13:04will not be very hawkish.
13:05Because,
13:07reasonable control,
13:08last quarter,
13:10because of the strong FNR deposit,
13:13that we received.
13:15Okay.
13:16And,
13:17the earnings growth,
13:18is good for companies.
13:20But,
13:21yes,
13:21if it will be better,
13:23so,
13:24I think,
13:24it will be a manageable commentary,
13:26from a commentary perspective,
13:27if I have to just say,
13:28that next,
13:291-2 quarters,
13:30RBI will see,
13:30how the move will happen.
13:32If this tension,
13:34in the Middle East,
13:35and crude,
13:36it will be reduced.
13:37So,
13:37I think,
13:38the policy,
13:39will also take,
13:41into account,
13:42all of those factors,
13:43as well.
13:44Okay.
13:45Sir,
13:45U.S. Treasury Yield,
13:47we have a lot of reports,
13:50on the U.S. Treasury Yield.
13:51But,
13:52one more discussion,
13:53which we have started,
13:54is,
13:54to take the Treasury Yields,
13:56because,
13:57that is also very important,
13:58to see,
13:59the term,
14:00that is also very important,
14:01to understand,
14:01that is also very important,
14:03to understand.
14:04Japan's Yields,
14:053% plus,
14:07which,
14:07is because,
14:07the Japanese investors,
14:10traditionally,
14:11who had a lot of capital,
14:12who had a lot of export,
14:13they were taking more capital,
14:15and taking more capital,
14:16and taking more country.
14:17Now,
14:17this impact,
14:19how are you seeing it,
14:19sir?
14:20the other thing,
14:21the Japanese investors,
14:22who,
14:23who,
14:23who,
14:23who,
14:24who,
14:24who,
14:24who,
14:24who,
14:30Who,
14:31who,
14:32who,
14:33who,
14:33who ?
14:35So, if you look at the traditional India-Japan relationship, there were a lot of institutional investors
14:42in India.
14:44And for a decade or more, there were a lot of domestic returns in the emerging markets.
14:55So, yes, there will be a portfolio rebalance.
14:59Okay, a portion of the portfolio, which they put in the emerging markets,
15:03they will put their own market in the market,
15:05because they will give their own market 3%.
15:08So, there are 3% plus the emerging market risk of India plus the hedging cost.
15:14If the return that we are giving, which is 7% or 7.5% in that range,
15:19if that is attractive, then they will add some capital.
15:22If they think it's not attractive, then the rebalancing of the portfolio will definitely be.
15:28But I think bigger, there are a lot of other factors of attracting capital from Japan,
15:33that India is a fast-growing economy.
15:36We are now doing a project with around 8.5% GDP growth.
15:41So, if they are long-term investors, from that perspective, we expect that capital inflow will be.
15:48We have recently seen that many Japan institutions and large institutions,
15:54Indian financial markets,
15:56we are going to go to NBFC, banks, etc.
15:59We are taking a lot of big exposures.
16:01So, long-term investments will come, factoring the GDP growth.
16:05Yes, short-term reallocation in the bond and in the Indian bond,
16:10there will be a reallocation definitely.
16:11Okay.
16:13Coming back to equity markets, sir.
16:15Current situation in which we are discussing.
16:18What is the outlook on Nifty or the broader market?
16:21Short-to-medium term, how does the Bazaar look like?
16:24Valuation multiples, the PE we are discussing.
16:28Is there any pressure on that?
16:30Definitely pressure.
16:32Because if the yield increases the U.S.
16:35The first company that was performing,
16:38which they received a valuation,
16:39they need to perform a better performance today
16:42to get the same valuation.
16:45So, the investors,
16:47the big investors,
16:48they see the spread.
16:50So, today, they want to maintain the same spread,
16:53they will expect a better performance from our Indian corporates
16:57to maintain the valuations.
16:59Because our valuation is already high globally,
17:03if we compare them.
17:04Not to maintain that,
17:05because we have a growth,
17:06that's why we are high.
17:07But if we have to maintain that,
17:09and because the U.S. yield has increased,
17:11we will have to perform more better
17:14to make ourselves attractive in the equity market.
17:18Nifty, 23,000.
17:20The Indian equity market can be attractive in the near future.
17:26What do you show a short to medium term outlook?
17:28I think next 1-2 quarter will be tough.
17:31Okay?
17:32Because again,
17:33the U.S. bond has increased,
17:36crude is hovering around $100.
17:39Right?
17:39There is definitely pressure in the rupee.
17:42So, if we keep these three factors,
17:45then definitely,
17:46our Indian equity market will be pressure in the next 1-2 quarter.
17:51Okay?
17:53Unless one or the other situation eases.
17:57By that time,
17:58then definitely,
17:59it will be better.
18:01Look,
18:02the U.S. Fed's next quarter,
18:04who also comes to the guidance,
18:07they play as to how our equity market will be.
18:11So,
18:11what do you think about borrowing costs?
18:14Because we are talking about earnings in the next 2 quarter.
18:17How will the Indian companies deal with borrowing costs?
18:20Will it affect the borrowing costs?
18:21In fact,
18:21will it affect the lending costs?
18:22Will it affect the lending costs?
18:25Yes.
18:26when you increase the yield of the country,
18:29the borrowing costs will definitely increase.
18:32Here,
18:32more than the U.S. yield and the Japanese yield,
18:34we will see that our GSEC rate is increasing.
18:37If our GSEC rate is increasing,
18:42if our GSEC rate is linked to our GSEC,
18:44if our GSEC rate will increase,
18:46then our GSEC rate will increase.
18:49If our GSEC rate will increase,
18:51then our GSEC rate will increase.
18:52So,
18:52there are some Indian companies
18:53who have received an ECB loan
18:55at some rate
18:56from 2-3 years ago.
18:58When the rate was reduced,
18:59if their rollover is now coming,
19:01next 6 months,
19:03then the rollover will be expensive
19:07than what they had originally bought.
19:08So,
19:09I think,
19:10there is some impact
19:11that we can see
19:13where all these rollovers will come
19:16in the next 6-12 months.
19:18So,
19:20I think,
19:21this is the last question.
19:21We have discussed the markets.
19:23We have discussed the bond market.
19:24We have discussed the bond market.
19:26One of the most important markets
19:28is where the bond,
19:30the treasury yields of the U.S.
19:31and Japan,
19:32the bonds of the higher rate
19:34are the biggest impact.
19:35That is our commodity market.
19:37Gold and silver,
19:38bullion basically
19:39is very volatile.
19:41In fact,
19:42if we talk about the near future
19:43or if we talk about recent rates,
19:44we have discussed the bond market.
19:45So,
19:46the bond market has reached its level.
19:49We have discussed the bond market.
19:50It is a crash.
19:51When it comes to bullion,
19:51the bond market has been created.
19:53When will this panic be created?
19:56I think,
19:56the bullion has seen
19:58that over the last 12 months,
20:00it has increased quite a lot.
20:02I think,
20:03I will not say,
20:05from the peak,
20:06it has been a crash.
20:06I think,
20:07that it is stable.
20:08It is a crash.
20:09I think,
20:09It is a crash.
20:10I think,
20:11next few months,
20:12I think bullion,
20:13I think bullion,
20:14I think bullion,
20:14in this range,
20:18depending on crude,
20:19how it is behaving.
20:20Unless,
20:21unless,
20:21because,
20:23unless,
20:24there is more stress,
20:25then gold,
20:27we expect it to rise further.
20:29Otherwise,
20:30historically,
20:31gold already,
20:32even at today's level,
20:33it has given a good return.
20:35Okay?
20:35But,
20:36we cannot expect it,
20:38like in the last year,
20:39the next year,
20:39it will run.
20:40Right?
20:4130%,
20:4240% return.
20:43So,
20:44it is already given a good return.
20:45I think,
20:46it will stabilize,
20:47in this area,
20:48only,
20:49for next,
20:49few quarters.
21:19Yes.
21:20minus 10%
21:21more.
21:22Okay.
21:23All right.
21:25Thank you so much,
21:26Vinit Ji.