Easing tensions between the Reserve Bank of India (RBI) and the government was likely to be positive for Indian Rupee (INR) assets particularly as the central bank was seen to retain its operational autonomy, said a leading Singapore bank. Knee jerk gains in bonds are likely, before returning to familiar drivers particularly in midst of the sharp overnight sell-off in the US markets, said the DBS Banking Group in its report on Tuesday. INR bonds have retained recent gains but struggled to make further headway. Lower oil and firmer rupee (+3.2 per cent month-to-date) have benefited INR bonds, as domestic and foreign investors made a return. But public sector banks have also sold into the recent bond rally to trim treasury losses; holdings are down INR 290 billion (USD 3.9 billion) in October-November after INR 265 billion purchases in Q3. The next tranche of INR 80 billion bond buybacks will be conducted on November 22. The 10-Year yields are likely to hover in the 7.65-7.85 per cent range, with bears to monitor domestic fiscal concerns and oil price direction.