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Bond yields edge higher ahead of Rs 16,000 crore debt auction

04 Apr 2014 Evaluate

Bond yields edged higher on the back of weak sentiments as concerns over devolvement persisted in the Reserve Bank of India's sale of Rs 16,000 crore worth of debt on Friday. The weak sentiment also comes after bonds sold off over the last two days amid fears about tight cash conditions after the central banks decided to further cap the overnight borrowing window

On the global front, longer-dated U.S. Treasuries yields receded on Thursday after data showed U.S. initial jobless claims rose more than expected last week, causing some jitters ahead of the monthly labor market report due on Friday and spurring a safety bid. Meanwhile, brent crude held steady above $106 a barrel on Friday, on track for its biggest weekly fall in three months, on a potential rise in Libyan oil supply as major ports could open in days.

The yields on new 10 year Government Stock 2023 were trading 3 basis points higher at 9.04% from its previous close of 9.01% on Thursday.

The benchmark five-year interest rate swaps were trading 1 basis point higher at 8.61% from its previous close of 8.60% on Thursday.

Reserve Bank of India will conduct a 14-day term repo variable rate auction for a notified amount of Rs 40,000 crore on March 21, 2014. The reversal of the 14-day term repo will take place on April 4, 2014.

The Government of India announce the sale of Four dated securities for Rs 16,000 crore on April 4, 2014, including (i) 8.35% Government Stock 2022 for a notified amount of Rs 4,000, (ii) 8.28% Government Stock 2027 for a notified amount of Rs 7,000 crore (iii) 9.20% Government Stock 2030 for a notified amount of Rs 2,000 and lastly (iv) 9.23% Government Stock 2043 for a notified amount of Rs 3000 crore respectively, to be will be conducted using uniform price method.

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