On Thursday, government bond yields in India increased by 9 basis points to close at 7.13%, influenced by a 6% surge in Brent crude oil prices, which reached $107 per barrel. This rise followed comments from US President Donald Trump regarding ongoing tensions in the Middle East. Additionally, the yield on the benchmark 10-year US Treasury note rose by 5 basis points to 4.35%, further pressuring domestic yields. Dealers noted that the overnight index swap (OIS) rates also increased, with the one-year OIS rising to 6.37% from 6.25% and the five-year OIS climbing to 6.87% from 6.79%. The uptick in yields was exacerbated by a recent gilt auction that saw lower-than-expected demand, prompting a sell-off in the secondary market. Market sentiment was further dampened as traders opted not to hold positions over the long weekend due to uncertainties. Analysts predict that the benchmark 10-year government bond yield may test 7.25% by the end of April, driven by heavy supply of state development loans (SDLs) and global economic factors. The government plans to issue ₹8.2 trillion ($99 billion USD) in dated securities in the first half of FY27, which could exert additional upward pressure on yields.