FOCUS WILL NOW SHIFT TO THE INDIAN RESPONSE
If last 2 weeks were about implications of 50% tariffs, the coming week will be about Indian response. India is not succumbing to US pressure, but the big challenge for India is to find an alternate market for its exports like textiles, leather, gems & jewellery, chemicals etc?
With the RBI keeping rates on hold, action shifts to the CPI inflation announcement next week. Apart from the US consumer inflation, the markets will also closely watch the India trade data for July 2025, for signs of front-loading of exports ahead of punitive tariffs.
The table captures US 10-year benchmark bond yields over the last 5 trading sessions.
| Date | Price (%) | Open (%) | High (%) | Low (%) |
| Aug 08, 2025 | 4.283 | 4.246 | 4.289 | 4.242 |
| Aug 07, 2025 | 4.244 | 4.238 | 4.254 | 4.219 |
| Aug 06, 2025 | 4.218 | 4.216 | 4.283 | 4.212 |
| Aug 05, 2025 | 4.196 | 4.188 | 4.226 | 4.187 |
| Aug 04, 2025 | 4.198 | 4.208 | 4.257 | 4.192 |
| Aug 01, 2025 | 4.220 | 4.376 | 4.414 | 4.202 |
Data Source: Bloomberg
The bond yields, this week, bounced from 4.220% to 4.283%. With Trump getting aggressive on tariffs, markets are less sure of a rate cut in September. The consensus is that rate cuts may still happen, albeit back-loaded in 2026. Last week, US 10-year bond yields touched a high of 4.289% and a low of 4.187%.
Here is the US dollar index (DXY), an index of dollar strength, over last 5 trading sessions.
| Date | Price (%) | Open (%) | High (%) | Low (%) |
| Aug 08, 2025 | 98.18 | 97.98 | 98.35 | 97.96 |
| Aug 07, 2025 | 98.40 | 98.19 | 98.47 | 97.94 |
| Aug 06, 2025 | 98.18 | 98.75 | 98.84 | 98.13 |
| Aug 05, 2025 | 98.78 | 98.62 | 99.07 | 98.58 |
| Aug 04, 2025 | 98.78 | 98.65 | 98.98 | 98.59 |
| Aug 01, 2025 | 99.14 | 100.01 | 100.26 | 98.61 |
Data Source: Bloomberg
The US dollar index (DXY) fell back this week from 99.14 levels to 98.18 levels. The tariff uncertainty is not making traders comfortable about the dollar. The US dollar index (DXY) touched a high of 99.07 and a low of 97.94 this week. For now, 100 is the resistance for DXY.
The table below captures 10-year India bond yields for the last 5 trading sessions.
| Date | Price (%) | Open (%) | High (%) | Low (%) |
| Aug 08, 2025 | 6.399 | 6.386 | 6.418 | 6.374 |
| Aug 07, 2025 | 6.390 | 6.414 | 6.414 | 6.385 |
| Aug 06, 2025 | 6.407 | 6.328 | 6.424 | 6.326 |
| Aug 05, 2025 | 6.324 | 6.314 | 6.338 | 6.307 |
| Aug 04, 2025 | 6.313 | 6.346 | 6.346 | 6.313 |
| Aug 01, 2025 | 6.371 | 6.377 | 6.378 | 6.367 |
Data Source: RBI
India bond yields edged up from 6.371% to 6.399%; after the RBI opted to maintain status quo on rates in the August policy. The rise in the bond yields could also be partially attributed to bond selling, although FPIs are net buyers. Last week, India 10-year bond yields touched a high of 6.424% and low of 6.307%.
The table captures the official USDINR exchange rate for last 5 trading sessions.
| Date | Price (₹/$) | Open (₹/$) | High (₹/$) | Low (₹/$) |
| Aug 08, 2025 | 87.489 | 87.435 | 87.759 | 87.435 |
| Aug 07, 2025 | 87.446 | 87.715 | 87.798 | 87.345 |
| Aug 06, 2025 | 87.725 | 87.785 | 87.851 | 87.629 |
| Aug 05, 2025 | 87.830 | 87.977 | 87.977 | 87.736 |
| Aug 04, 2025 | 87.680 | 87.284 | 87.727 | 87.155 |
| Aug 01, 2025 | 87.245 | 87.490 | 87.673 | 87.170 |
Data Source: RBI
The USDINR weakened from ₹87.245/$ to ₹87.489/$; and spent the entire week above the ₹87/$ mark. This was largely on account of tariff uncertainty and the possibility of India’s trade deficit and CAD spiking, in a worst case scenario. Last week, USDINR touched a high of ₹87.155/$ and a low of ͅ₹87.977/$. Banks continued to buy dollars aggressively.
The table captures the Brent Crude prices over last 5 trading sessions.
| Date | Price ($/bbl) | Open ($/bbl) | High ($/bbl) | Low ($/bbl) |
| Aug 08, 2025 | 66.59 | 66.42 | 67.22 | 65.53 |
| Aug 07, 2025 | 66.43 | 66.88 | 67.68 | 66.27 |
| Aug 06, 2025 | 66.89 | 67.75 | 69.18 | 66.22 |
| Aug 05, 2025 | 67.64 | 68.75 | 68.87 | 67.52 |
| Aug 04, 2025 | 68.76 | 69.11 | 69.98 | 68.00 |
| Aug 01, 2025 | 69.67 | 71.83 | 72.00 | 69.40 |
Data Source: Bloomberg
After surging to $73.63/bbl in the previous week over Russia sanctions, oil fell back to $66.59/bbl on OPEC Plus supply concerns. Demand also remains a key factor. Last week, Brent Crude touched a high of $69.98/bbl and a low of $65.53/bbl. For now, it does look like India will continue to buy oil from Russia, and that will keep global oil supply in balance.
The table captures the international spot prices of gold in dollars per troy ounce (oz).
| Date | Price ($/oz) | Open ($/oz) | High ($/oz) | Low ($/oz) |
| Aug 08, 2025 | 3,398.78 | 3,397.28 | 3,408.83 | 3,379.61 |
| Aug 07, 2025 | 3,397.31 | 3,366.11 | 3,402.71 | 3,364.77 |
| Aug 06, 2025 | 3,369.04 | 3,379.69 | 3,385.47 | 3,358.26 |
| Aug 05, 2025 | 3,381.27 | 3,373.38 | 3,390.62 | 3,349.89 |
| Aug 04, 2025 | 3,373.37 | 3,365.10 | 3,385.56 | 3,345.00 |
| Aug 03, 2025 | 3,362.13 | 3,364.30 | 3,364.41 | 3,354.62 |
| Aug 01, 2025 | 3,362.88 | 3,290.83 | 3,363.55 | 3,281.55 |
Data Source: Bloomberg
Spot gold prices closed the week near to $3,400/oz on rising global macro concerns. There are concerns that an Indo-US stand-off may not good news overall. During the week, gold touched a high of $3,408.83/oz and a low of $3,345.00/oz.
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