Bond yields were trading lower on some short-covering activities after primary dealers sold as much as Rs 3945 crore worth of debt in the previous trading session. Traders now await the composition of this week's debt sale for further cues.
On the global front, U.S. Treasuries prices fell on Friday after unexpectedly better housing data pointed to a strengthening U.S. economy, pulling benchmark 10-year yields up from six-month lows. U.S. housing starts jumped in April and building permits hit their highest level in nearly six years, offering hope that the troubled housing market could be stabilizing. Meanwhile, Brent crude rose to $110 a barrel on Monday on renewed concerns over Libya's oil output and following some of the worst violence in Tripoli since the 2011 war against Muammar Gaddafi.
Back home, the yields on new 10 year Government Stock 2023 were trading 2 basis points lower at 8.81% from its previous close of 8.83% on Friday.
The benchmark five-year interest rate swaps were trading 2 bps at 8.25% from its previous close of 8.27% on Friday.
The Reserve Bank of India has announced the auction of 182 and 91 days Government of India Treasury Bills for notified amount of Rs 6,000 crore and Rs 9000 crore respectively. The auction will be conducted on May 21, 2014 using 'Multiple Price Auction' method