Crude spike and RBI policy cues keep bond markets on edge in volatile 2026

India’s bond and currency markets are reacting to rising global risks as crude prices surge—Brent up 85%, WTI 100%, and Russian crude 140% in 2026. The rupee holds above 93 per dollar, but oil-driven inflation concerns persist. Markets await the US-Iran deadline on the Strait of Hormuz, and the RBI policy, where rates may stay unchanged, but liquidity and inflation cues will be key. Heavy government borrowing and rising global yields, led by Japan, are adding pressure.