Bond yields edged higher in the range-bound trade on liquidity concerns after reports suggested that could be around $500 billion outflows in the week on account of monthly tax payments and payments tied to Friday's auction. However, sharp uptick in the yields has been ruled out as liquidity still remains to be broadly comfortable.
Nevertheless, uncertainty about the monsoon, continues to weigh on sentiment, although that is being offset, as Brent crude hovers near a three-week low as Libya gears up to resume exports from two ports that have been closed for nearly a year.
On the global front, U.S. benchmark Treasuries yields eased from two-month highs on Thursday to trade slightly higher after traders reconsidered a strong U.S. June nonfarm payrolls report and reacted to comments from European Central Bank chief Mario Draghi. Meanwhile, brent crude prices hovered near a three-week low just above $110 a barrel on Monday, hurt by a potential rise in oil supply as Libya gears up to resume exports from two ports that have been closed for nearly a year.
Back home, the yields on new 10 year Government Stock 2023 were trading 1 basis point higher at 8.67% from its previous close of 8.66% on Friday.
The benchmark five-year interest rate swaps were trading 1 basis point higher at 7.82% from its previous close of 7.81% on Friday.
Eight State Governments have offered to sell 4/5/10 year securities by way of auction for an aggregate amount of Rs 6,300 crore on July 8, 2014.
The Reserve Bank of India has announced the auction of 364 and 91 days Government of India Treasury Bills for notified amount of Rs 6,000 crore and Rs 9000 crore, to be conducted on July 09, 2014 using 'Multiple Price Auction' method.
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