** Indian Sovereign Bonds Retreat as U.S. Yields Surge** **Executive Summary** Indian government bonds have resumed a downward trajectory, heavily influenced by a sharp rise in U.S. Treasury yields. External pressures regarding the Federal Reserve’s policy path have overshadowed domestic supply dynamics, keeping market sentiment bearish. **Key Drivers** * **Global Contagion:** Indian bonds are tracking U.S. Treasuries, which saw yields jump on Friday. This volatility stems from revised expectations regarding the Federal Reserve's interest rate path and emerging concerns regarding central bank independence. * **Supply Dynamics:** Despite a reduction in state debt supply—typically a supportive factor for prices—the overwhelming pressure from rising global yields has negated any positive impact. * **RBI Intervention:** Current bond-buying operations by the Reserve Bank of India have offered minimal relief, failing to offset the broader selling pressure induced by the external environment.