More Stories

Informist, Monday, Aug. 10, 2026

 

By Cassandra Carvalho

 

MUMBAI – Overnight indexed swap rates ended steady Monday with traders awaiting fresh developments onshore and on the geopolitical front. Some swaps edged higher near the end of trade, tracking a slight rise in Brent crude oil price and US Treasury yields, dealers said. Volumes were thin with no major flows from offshore participants either, they said. The total notional trading volume reported on Clearing Corp. of India Ltd.'s derivatives trading platform was INR 215.35 billion, down sharply from INR 305.80 billion Friday. The trading volume was the lowest since Jun. 22.

 

The one-year swap rate closed at 5.78%, marginally up from 5.77% Friday. The five-year swap rate settled at 6.26%, the same as in the previous session.

 

"The paying has stopped, so I think that's a good thing," a dealer at a private-sector bank said. "One-year OIS is still pricing in 50 bps (basis points) of hikes, which I think is fairly priced. I think even 50 bps may be a bit much this year given the way RBI (Reserve Bank of India commentary on rates) is going."

 

Offshore traders received fixed-rate contracts in swaps in early trade in small volumes after an unexpectedly weak jobs report in the US for July lowered expectations of a rate hike by the US Federal Open Market Committee in September, dealers said. Since the war in West Asia flared up again in July, offshore traders--especially model funds--have aggressively paid fixed-rate contracts, they said. Foreign banks likely received swap rates to deploy inflows received through foreign currency non-resident (banks) deposits.

 

Non-farm payrolls in the US unexpectedly fell by 23,000 in July against a Wall Street Journal poll estimate of an 83,000 rise. However, higher US Treasury yields even after the weak jobs report provided little comfort to domestic traders, they said. The yield on the 10-year US Treasury note rose to 4.67% as of 1700 IST, from 4.66% as of 0900 IST and 4.66% at 1700 IST Friday. Nearing the end of trade, Brent crude oil futures for delivery in October rose to $84.46 per barrel, hitting a day's high of $85.14 per barrel, against $84.26 at 0900 IST and $81.83 per barrel at the end of swap market hours Friday. 

 

"We need to see a one-side move; either the war needs to de-escalate or the US 10-year (yield) needs to fall below 4.60%," a dealer at another private-sector bank said. Some traders see the possibility of swaps falling lower, especially if crude oil prices fall. However, most traders expect swap rates to have bottomed out, making these levels ideal to pay fixed rates, dealers said. 

 

OUTLOOK

Tuesday, swap rates will track the overnight movement of crude oil prices and US Treasury yields, dealers said. Traders will also track remarks from Reserve Bank of India Governor Sanjay Malhotra at the Financial Institution Benchmarking and Calibration Conference organised by the Federation of Indian Chambers of Commerce and Industry and Indian Banks' Association. Most expect his remarks to align with his policy statement last week. The governor could perhaps offer clarity on the timeline of the FCNR(B) deposit facility, after traders largely dismissed a report by the Financial Express Monday that stated the facility could be closed earlier than the Sept. 30 deadline, dealers said.

 

Traders also await the release of CPI inflation data for July, both in India and in the US, due Wednesday, for clues on the interest rate trajectory in the two economies, dealers said. India's headline inflation is seen unchanged on month at 4.4% in July, according to the median of an Informist Poll of 12 economists. CPI inflation in the US is seen rising 3.4% on year in July, as per a survey compiled by The Wall Street Journal.

 

Some foreign banks are still seen receiving fixed rates due to foreign inflows through FCNR(B) deposits, dealers said. The movement of the rupee and overnight borrowing rates will also lend cues. The one-year swap rate is seen in the range of 5.65-6.10% and the five-year at 6.12-6.40%.

 

	At 1700 IST	FRIDAY
1-year OIS	5.78%	5.77%
2-year OIS	5.95%	5.94%
5-year OIS	6.26%	6.26%
2-year MIFOR	6.83%	6.86%
5-year MIFOR	7.01%	7.04%

 

End

 

US$1 = INR 95.30

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.