MUMBAI, July 10 (Reuters) - Indian government bond yields are expected to open marginally higher on Wednesday, mirroring a rise in Treasury yields, after Federal Reserve Chair Jerome Powell offered few hints on the timing of interest rate cuts in the United States.
The benchmark 10-year yield is likely to move in a 6.98%-7.02% range, following its previous close at 6.9883%, a trader with a private bank said.
"Benchmark yield may touch the 7% handle today, as market was anticipating a dovish tilt from the Fed chief, but the commentary clearly does not indicate this," the trader said.
U.S. bond yields ended higher on Tuesday, after witnessing four straight sessions of decline, with the 10-year yield rising above the 4.30% mark.
Powell in prepared remarks to Congress said that he did not want to be sending any signals about the timing of any future actions on interest rates, and that the labour market appears to be fully back in balance.
"We are well aware that we now face two-sided risks," and can no longer focus solely on inflation, Powell said on Tuesday. His testimony to the U.S. Congress continues on Wednesday.
The probability of a 25 basis point Fed rate cut in September eased marginally to 73% from 77% a day ago, but expectations of 50 bps cuts in 2024 remain intact, according to CME FedWatch Tool.
Capital Economics said the neutral tone of Powell's opening statement seems at odds with the softer tone of the recent activity data, and continues to expect rate cuts of 25 bps each in September and December.
Traders await U.S. and Indian inflation data due over the next two sessions.
They also wait for India's federal budget on July 23. KEY INDICATORS: ** Brent crude futures little changed at $84.65 per barrel, after falling 1.3% in the previous session ** Ten-year U.S. Treasury yield at 4.3096%, two-year yield at 4.6368% ** Reserve Bank of India to auction treasury bills worth 200 billion rupees ($2.40 billion) ($1 = 83.4850 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Mrigank Dhaniwala)
