MUMBAI, Jan 24 (Reuters) - Indian government bond yields crawled in a narrow range in the early session on Wednesday as traders awaited fresh triggers, including the sale of debt from the central government this week.
India's benchmark 10-year yield was at 7.1718% as of 10:00 a.m. IST, following its previous close at 7.1751%.
New Delhi aims to raise 330 billion rupees ($3.97 billion) through the sale of bonds on Thursday as Indian markets will remain shut on Friday for a public holiday.
The auction includes 160 billion rupees of the benchmark paper and will take the outstanding issuance to 1.85 trillion rupees.
"There may be some move tomorrow based on the response for debt auction, especially for the benchmark, as this would be the last auction before the budget announcement," a trader with a private bank said.
The government is due to announce the Union Budget for the next financial year on Feb. 1.
The government is expected to reduce the fiscal deficit as a percentage of GDP to 5.30%, from 5.90% in the current year, and aim for a gross borrowing of a record 15.60 trillion rupees, up from 15.43 trillion rupees this fiscal, according to a Reuters poll.
Meanwhile, U.S. yields remained elevated as investors await economic growth and inflation data, due later in the week, that could influence the timing of the Federal Reserve's interest rate cuts.
A string of strong economic data in recent days has pushed the 10-year U.S. yield above the 4.10% mark and has led to the trimming of bets about the timing and pace of rate cuts by the Federal Reserve in 2024.
Traders have now lowered the odds of the first Fed rate cut by March to 49% from 65% on Jan. 16, while the probability of a 150 bps cut in 2024 has dropped to 53% from 82%, according to the CME's FedWatch Tool.
($1 = 83.1450 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Sohini Goswami)
