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Bond yields edge tad higher after FIIs turn net sellers in debt market

25 Aug 2014 Evaluate

Bond yields edged tad higher as foreign investors sold debt worth $82.14 million on Thursday after posting their biggest buy in a single session on Wednesday. Meanwhile, yields also inched up on prevailing cautiousness across the globe after Fed Chair Yellen was seen as less dovish than expected. Fed Chair Janet Yellen on Friday amid calls from policy hawks for a near-term rate hike, said that Federal Reserve should move cautiously in deciding when to raise interest rates given the US labour market remains bruised from the Great Recession.

On the global front, U.S Treasury prices recovered early losses on Friday with investors caught between the cautious message over labor markets from Fed Chair Janet Yellen and geopolitical risks from the Ukraine crisis that is hampering euro zone economic growth. Meanwhile, brent crude was trading sub $102 a barrel on Monday as ample supply and a stronger U.S. dollar continued to pressure oil markets.

Back home, the yields on new benchmark 8.40%- 2024 bond was trading 1 basis point higher at 8.53% from its previous close of 8.52% on Friday.

The benchmark five-year interest rate swaps were trading unchanged at its previous close of 8.01% 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 5,000 crore and Rs 8000 crore respectively. The auction will be conducted on August 27, 2014 using 'Multiple Price Auction' method.

Ten State Governments have offered to sell 5/10 year securities by way of auction for an aggregate amount of Rs 7,680 crore) on August 26, 2014.

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