Bond yields were trading at its lowest since July 15, 2013 on Friday on hopes of early rate cut after global oil prices tumbled to 5-1/2 year low. Traders await key macroeconomic data, i.e, consumer price index (CPI)-based inflation and Index of Industrial Production (IIP) data on Friday, which is to be released later in the day. While, the street expects CPI inflation to be around 4.4% in November compared with 5.52% in October, IIP is expected to grow 2.7% in October compared with 2.5% in September.
On the global front, long bonds rallied and the yield curve was the flattest in six years on Thursday after the government auction for 30-year bonds saw strong demand, selling at the lowest yields since 2012. Meanwhile, brent crude oil slipped on Friday to below $63 a barrel, its lowest since July 2009, dragged down by persistent concerns over a global supply glut and a sluggish demand outlook.
Back home, the yields on new 10 year Government Stock 2023 were trading 2 basis points lower at 7.85% from its previous close of 7.87% on Thursday.
The benchmark five-year interest rate swaps were trading 3 basis points lower at 7.09% from its previous close of 7.12% on Thursday.
The Reserve Bank of India will conduct 3 day reverse repo variable rate auction for a notified amount of Rs 15,000 crore today (December 12, 2014, Friday). The auction will be conducted between 4.00pm and 4.30 pm as per the revised guidelines on Term Repo Auctions issued on February 13, 2014
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