Indian bonds steady before supply test as oil stalls

Brent crude futures eased into a holding pattern at $93.5 a barrel in Asian trade.

Sentiment has weakened since the RBI released minutes of its August meeting on Wednesday, which struck a more hawkish tone than its policy statement. Expectations of an RBI rate hike this year have resurfaced as inflation pressures build. Domestic support has ebbed after the central bank brought forward by a month the closure of a dollar-attracting scheme that had been a key source of bond demand.

Retail inflation in July accelerated to 4.45%, above the RBI's 4% medium-term target.

Traders said higher oil prices and global yields would shape the market's next move. The U.S. 10-year Treasury yield was near 4.70%, adding pressure.

India's overnight indexed swap rates awaited fresh cues after a sharp rise in the previous session. The one-year swap rate was flat at 5.9250%. The two-year rate rose 1 basis point to 6.17%. The liquid five-year rate was little changed at 6.4725%.