MUMBAI, July 9 (Reuters) - Indian government bond yields were marginally lower early on Tuesday, with traders awaiting comments from U.S. Federal Reserve Chair Jerome Powell for hints on the timing of a potential rate cut.
The benchmark 10-year yield was at 6.9833% as of 10:20 a.m. IST, following its previous close at 6.9911%.
The 10-year U.S. Treasury yield was steady on Monday as investors took a pause before getting guidance from the Fed and from June inflation data, due on Thursday.
Powell's testimony before the Senate on Tuesday and the House on Wednesday could give investors more clues on the likely direction of rates.
The probability of a 25 basis point Fed rate cut in September is currently at 71%, with traders betting on a total of two 25 basis point cuts for the whole of 2024.
In India, traders are also waiting for local inflation data on Friday and the first union budget of the newly-elected government on July 23.
Prime Minister Narendra Modi's new government may tilt towards, but not pivot to welfare spending, with a focus on rural economy and job creation, economists at Goldman Sachs said.
Goldman economists expect the government to stick to its fiscal deficit target of 5.1% of GDP set in the interim budget but said it will likely make an "overarching statement" about long-term economic policy.
Later in the day, five states will raise 61 billion rupees ($730.65 million) through sale of bonds.
Barclays expects local retail inflation to have eased marginally to 4.6% on-year in June, from 4.75% in May, but eyes a sharp drop over the next few months.
($1 = 83.4875 Indian rupees) (Reporting by Bhakti Tambe; Editing by Nivedita Bhattacharjee)
