MUMBAI, Jan 16 (Reuters) - Indian government bond yields were likely to rise marginally on Monday as oil prices continued to move higher, dampening investor sentiment.
The benchmark 10-year yield was expected to move in a range of 7.28%-7.33%, a trader with a private bank said.
The yield ended at 7.3003% on Friday. It fell seven basis points last week, its biggest weekly drop in six.
"With crucial data points behind us, the market may focus on the move in oil prices and may react slightly negatively," the trader said.
Oil prices rose, with the benchmark Brent crude moving higher in all five trading sessions of last week, on optimism that China's reopening will lift fuel demand from the world's top crude importer, and also as the U.S. dollar dropped to a seven-month low.
India is one of the largest importer of the commodity, and its price has a direct impact on local retail inflation.
The nation's retail inflation eased to 5.72% in December from 5.88% in the prior month, against expectation of 5.90%. The reading still remains close to the upper tolerance range of the Reserve Bank of India, which may force them to under take one more round of rate hike in February.
The RBI aims to maintain inflation within 2%-6%, and has raised repo rates by 225 bps in 2022.
The central bank may hike rate by 25 bps next month, but the policy statement or Governor Shaktikanta Das' statement may provide an explicit guidance of pause in future and they may not change the stance to "neutral", ICICI Securities Primary Dealership said. KEY INDICATORS: ** Brent crude futures down 0.2% at $85.10 per barrel, after rising over 8.5% last week ** 10-year U.S. Treasury yield was at 3.5110% and the two-year note at 4.2410%. ** India aims to switch bonds worth 110 billion rupees ($1.35 billion) ($1 = 81.2800 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee)
