Bond yields were trading lower tracking lower crude oil prices and on account of prevailing positive sentiment after RBI, in its fifth bi-monthly monetary policy, underscored that monetary easing may happen in early 2015. Additionally, prevailing cautiousness ahead of the key U.S. jobs report later in the session, which would render some direction in the near term, also weighed on the sentiment. The U.S. nonfarm payrolls report is expected to show that employers added 230,000 new jobs last month, and the unemployment rate is seen remaining unchanged at 5.8%.
On the global front, U.S. Treasuries prices rose on Thursday, while European bond prices sagged, after the euro zone's chief central banker said policymakers would not decide until early next year if the slowing region needs more economic stimulus. Meanwhile, brent crude fell close to $69 a barrel on Friday, putting it on track for a second weekly decline, as cuts to official selling prices from Saudi Arabia reverberated across the market.
Back home, the yields on new 10 year Government Stock 2023 was trading 4 basis points lower at 7.93% from its previous close of 7.97% on Thursday.
The benchmark five-year interest rate swaps were trading 2 basis points lower at 7.15% from its previous close of 7.17% on Thursday.
The Reserve Bank of India will conduct overnight reverse repo variable rate auction for a notified amount of Rs 20,000 crore today (December 4, 2014, Thursday). The auction will be conducted between 4.00 p.m. and 4.30 p.m. as per the revised guidelines on Term Repo Auctions issued on February 13, 2014.
The Government of India have announced the sale (re-issue) of the Government Stock through auctions to be held on December 5, 2014, including (i) 8.27 per cent GS 2020 for a notified amount of Rs 2000 crore, (ii) 8.15 per cent GS 2026 for a notified amount of Rs 150 crore, (iii) 8.24 per cent GS 2033 for a notified amount of Rs 75 crore and lastly (iv) 8.30 per cent GS 2040 for a notified amount of Rs 75 crore.
The Reserve Bank of India will conduct 3 day variable rate reverse repo auction for a notified amount of Rs 30,000 crore today (December 5, 2014, Friday). The auction will be conducted between 4.00 p.m. and 4.30 p.m. as per the revised guidelines on Term Repo Auctions issued on February 13, 2014.