With rupee at new low, Indian bonds may be worst hit if recession grips US

Indian bonds have declined in tandem with a slide in the rupee. The currency is now hovering close to a record low against the dollar as elevated commodity prices stoke inflation and boost the subsidy

US recession risks are reverberating across the emerging Asian debt complex and nowhere is this more apparent than in Indian sovereign bonds.

Rupee debt has proven to be the most sensitive to an inversion of the US curve in the past and this time is unlikely to be different, according to a Bloomberg study which analyzed four episodes dating back to 2005. In each instance, India’s benchmark yields climbed an average 11 basis points in the 10 days before longer-term US rates fell below those on shorter-dated maturities.

The threat of a US downturn is the latest risk confronting Indian