Bond yields were trading water on Monday as traders preferred being on the sidelines ahead of bi-monthly monetary policy review on August 4, wherein central bank is expected to keep rates on hold and strike a less hawkish tone on inflation as displayed in June. However, drop in crude oil helped ease in yields.
On the global front, U.S. Treasuries prices gained on Friday after jobs data eased concerns about rising wage inflation, and reduced expectations that the Federal Reserve may act sooner than some had anticipated to increase interest rates. Meanwhile, Brent crude rose to $105 a barrel on Monday to come off of a four-month low, hit in the previous session, with worries about global oversupply still outweighing concerns about violence in the Middle East and North Africa
Back home, the yield on soon to be benchmark 8.40%- 2024 bond were trading steady at its Friday’s close of 8.52%
The yields on existing benchmark 2023, 10-year Government Stock were trading steady at its Friday’s close of 8.52%
The benchmark five-year interest rate swaps were trading 1 basis point higher at 8.76% from its previous close of 8.75% on Friday.
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 respectively. The auction will be conducted on August 06, 2014 using 'Multiple Price Auction' method.