India bond yields seen up tracking U.S. peers, oil

India bond yields seen up tracking U.S. peers, oil

MUMBAI, Aug 25 (Reuters) - Indian government bond yields are expected to rise marginally in early trades on Thursday, tracking higher U.S. yields and global oil prices.

The benchmark 10-year government bond yield IN065432G=CC is likely to trade in 7.27%-7.32% band, a trader with a private bank said. The yield has risen 11 basis points in the last five sessions. It had ended at 7.2858% on Wednesday.

"All factors have turned bearish for bonds, and we do not expect any major buying today or even tomorrow," the trader said.

The 10-year U.S. Treasury yield hit its highest level in eight weeks on Wednesday, as investors lightened positions ahead of the U.S. Federal Reserve's annual Jackson Hole conference, where Fed Chair Jerome Powell is scheduled to speak on Friday.

Interest rate futures imply a 60% chance of a 75 basis point Fed hike in September <FEDWATCH, up from 50% earlier this week.

Meanwhile, the benchmark Brent contract LCOc1 was hovering around its highest level in three weeks after Saudi Arabia suggested the Organization of the Petroleum Exporting Countries could consider cutting output.

India is a major importer of crude oil and domestic inflationary pressures are expected to mount due to higher prices. India's consumer inflation INCPIY=ECI has stayed stubbornly above 6% for seven straight months. KEY INDICATORS: ** Brent crude futures LCOc1 up 0.7% at $102 per barrel ** Ten-year U.S. bond US10YT=RR yield at 3.1039%
Reporting by Dharamraj Lalit Dhutia; Editing by Neha Arora