Indian government bond yields were largely unchanged in early trades on Monday, as investors exercised caution ahead of the U.S. presidential election due on Tuesday.

The benchmark 10-year bond yield was at 6.8497 per cent as of 10:00 a.m. IST, compared with the previous close of 6.8469 per cent.

"There is support to bond prices and the benchmark paper is close to that level, and even the recent rise in Treasury yields is unable to break that support level," trader with a primary dealership said.

Investors have been putting on trades betting that Republican candidate Donald Trump could be president again, although he is still neck and neck with Vice President Kamala Harris in several polls.

Trump's policies, including enacting higher tariffs on imports, are likely to stoke inflation and put upward pressure on U.S. yields, while also threatening to slow down the pace of rate cuts from the Federal Reserve.

The 10-year U.S. yield was above the 4.30 per cent mark in Asian hours, as investors feared the U.S. fiscal trajectory could worsen under both Harris and Trump presidencies.

Still, value purchases from local investors continued, with the benchmark bond yield hovering around the 6.85 per cent-mark, traders said.

State-run banks bought $5 billion worth of government bonds last month on a net basis, and are expected to continue their purchases if yields stay elevated, traders added.

The elections will be followed by the Fed's policy decision by the end of this week, with a 25-basis-point rate cut already priced in by the market, and guidance and commentary would be crucial.

Markets are pricing in another 50 bps of rate cuts from the Fed over the next three policy meetings from December to March, but the odds could change after the U.S. election results.

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